Corning's Profit Quadruples, Boosted by Dow Corning Sale
July 27 2016 - 10:43AM
Dow Jones News
By Brittney Laryea
Glassmaker Corning Inc. reported higher-than-expected
third-quarter earnings, as the company realized gains from its June
sale of its stake in Dow Corning.
"The realignment of our interest in Dow Corning is a significant
milestone," Chief Executive Wendell Weeks said.
In June, Corning ended a 73-year joint venture with Dow Chemical
Co., after it sold the remainder of its stake in Dow Corning for
$4.8 billion in cash and 40% equity interest in Hemlock
Semiconductor Group.
Chief Financial Officer R. Tony Tripeny said the company was
confident its sales and earnings performance would improve for the
next two quarters--despite recent pressures.
"The mobile consumer electronics industry is experiencing lower
smartphone and tablet demand in 2016, driven by world-wide
macroeconomic conditions, fewer major product launches and longer
replacement cycles," said Corning, which makes parts of Apple Inc's
iPhone.
Over all, Corning posted a second-quarter profit of $2.21
billion, or $1.87 a share, about quadruple its profit of $496
million, or 36 cents, a year earlier. Adjusted to exclude
restructuring, the company reported $434 million in profit, or 37
cents a share, down from $522 million, or 38 cents a share a year
earlier.
Revenue rose 0.7% to $2.36 billion.
Analysts polled by Thomson Reuters expected 32 cents per-share
earnings on $2.38 billion in revenue.
The ligher-than-expected revenue contributed to Corning
stock--which has gained 13% over the past three months--falling
3.4% to $20.97 in morning trading in New York.
Sales in the display technologies business--which makes up about
34% of the company's sales--rose 1.5% to $801 million, helped by an
uptick in demand in the global market. The optical communications
segment, at about 33% of sales, fell 2.3% to $782 million,
reflecting a software issue during the quarter that impacted the
company's cable production.
Its third-largest segment, specialty materials, reported sales
fell 2.2% when compared to a year ago.
Corning announced a $2 billion accelerated share repurchase with
plans to distribute $12.5 billion to shareholders through 2019 and
increase its dividend annually by a double-digit percentage.
Write to Brittney Laryea at Brittney.Laryea@wsj.com
(END) Dow Jones Newswires
July 27, 2016 10:28 ET (14:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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