Corning this morning said it suffered a power disruption over the weekend at its LCD glass manufacturing facility in Taichung, Taiwan which affected some glass-making operations.
Things keep getting worse for Corning, as demand for large-screen LCD televisions sags in the face of a global consumer recession.
The LCD glass maker this morning said it is now withdrawing the financial guidance it provided just a few weeks ago for the fourth quarter and for 2009.
In a statement, CFO James Flaws said that “Panel makers, particularly those in Taiwan, have continued to reduce the utilization of their factories heading into the second half of this quarter in response to weakened retail demand for LCD televisions and desktop monitors.”
Corning will cut the production capacity of its glass business by 30-40 percent due to a lack of demand in the LCD television market. It wasn’t until after Labor Day that the decline reached the sector, though fears about the economy have been growing all year.
Corning’s third-quarter results and fourth-quarter outlook appear to reinforce logic–in a recession, big screen TVs do not count as necessary luxuries. LED glass volume is projected to fall 10-20 percent in Q4–20-30 percent within Corning’s wholly owned glass business. CEO Wendell Weeks says the company plans to greatly reduce capital spending and development and engineering costs.
The troubles are deepening at LCD glass maker Corning (GLW).
This morning, Corning CFO James Flaws said in a statement that third-quarter glass shipments grew 2 percent sequentially, which was lower than expected. Corning said volume was was up 12 percent at Samsung Corning joint venture, but down 10 percent at the wholly-owned business.
Corning (GLW) this morning said it now sees Q3 profits before special items of 43-45 cents a share, down from previous guidance of 48-51 cents. Sales are now expected to be $1.58 billion to $1.62 billion, down from $1.65 billion to $1.72 billion. The company also dropped its gross margin expectation for the quarter to about 47 percent from “at least 50 percent.”
Shares of glass maker Corning (GLW), LCD panel producers AU Optronics (AUO) and LG Display (LPL) are all down sharply today amid a new wave of market jitters on the prospects for the flat-panel display market.
Several recent Street research reports note that conditions in the LCD panel sector have been difficult for much of the third quarter, raising questions about the companies’ ability to hit current Street estimates.
The sell-off in Corning (GLW) shares today reflects disappointment with the company’s third quarter revenue outlook. In an interview with Tech Trader Daily this morning, Corning CFO Jim Flaws says the lower-than-expected forecast reflects two underlying issues.
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