(Adds details on business segments, shares)
April 24 (Reuters) - Telecoms parts producer Corning Inc
beat expectations for profit on Tuesday thanks to
optical fiber cable sales, but a drop in sales in its screen
glass unit added to growing market nerves about demand for
Shares of Corning, whose toughened Gorilla glass is the
screen of choice for smartphones including Apple's
iPhone and Samsung's Galaxy, rose 2 percent in
trading before the bell.
At least two other Apple suppliers - contract chipmaker
Taiwan Semiconductor Manufacturing Co Ltd and
chipmaker AMS - have pointed to soft demand from
smartphone customers in the past week. Analysts have attributed
the softness to weaker-than-anticipated demand for the
Californian firm's iPhone X.
Global sales of smartphones to end users totaled nearly 408
million units in the fourth quarter of 2017, a 5.6 percent
year-over-year decline for the first time, Gartner Research said
Corning said on Tuesday net sales in its specialty materials
business, which makes Gorilla Glass, fell 7 percent to $278
million in the first quarter, missing analysts' estimate of $293
million, according to Thomson Reuters I/B/E/S.
Sales in its LCD glass business, used in televisions and
PCs, also declined 5 percent to $745 million, below Wall Street
estimates of $747.5 million.
The only bright spot was the demand for optical fiber cables
as telecom companies invest in upgrading their networks ahead of
the rollout of 5G.
The industry will spend $225 billion on 5G between 2019 and
2025, according to a research note published by Morgan Stanley
in October. (https://mgstn.ly/2vLY07U)
Net sales from Corning's optical communications business,
which makes fiber optic cables and connectors and contributes
nearly one-third to its total sales, rose 8 percent to $886
Corning's net loss was $589 million, or 72 cents per share
in the first quarter, compared with a profit of $86 million, or
7 cents per share, a year earlier.
On an adjusted basis, Corning earned 31 cents per share on
revenue of $2.51 billion. Analysts on average had expected a
profit of 30 cents per share and an adjusted revenue of $2.49
(Reporting by Laharee Chatterjee in Bengaluru; Editing by Maju
Samuel and Patrick Graham)
First Published: 2018-04-24 13:20:32
Updated 2018-04-24 14:50:06
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