GLW/JDSU/SDLI Article:July 17, 2000
Pat Mudge - you are the best! Thank you. I'll see you in fiber optic heaven.
Corning Profits Beat Estimates, Forecast Raised
Filed at 5:05 p.m. ET
By Reuters
NEW YORK (Reuters) - Corning Inc. (GLW.N) on Monday reported second-quarter earnings up 80 percent from a year earlier, which beat Wall Street expectations and were driven by strong sales of fiber optical cable and flat-panel display glass.
The company said second-quarter pro forma earnings reached $271.1 million, or 94 cents a share, compared with $136.5 million, or 52 cents per share, in the same quarter of 1999.
Wall Street had expected Corning, based in Corning, N.Y., to earn 80 cents a share, according to research firm First Call/Thomson Financial.
``My one-word reaction would be 'Wow','' Jordan Estra, analyst with Ryan, Beck & Co.
The news sent shares of Corning skyrocketing to a 52-week high of 282-15/16 before falling back to close at 279-1/4, up 12-1/4 Monday.
The pro forma net income excludes amortization of purchased intangibles and goodwill, in-process research and development, one-time acquisition costs, discontinued operations and other nonrecurring items.
The company boosted its outlook for full-year pro forma earnings to between $3.15 and $3.25 a share, about 60 percent above the year-earlier $2 a share. Analysts have forecast earnings of $2.92 a share.
``This revised outlook reflects our very strong performance this quarter and confidence for continued unprecedented demand for Corning's market-leading products through year-end,'' Roger
Ackerman, Corning's chairman and chief executive officer, said in a statement.
Estra said he expects most of the leaders of the fiber optics industry, such as Corning and JDS Uniphase Corp. (JDSU.O), to continue phenomenal growth throughout the next decade, fueled by demand for products that can deliver high-speed communications.
Fiber optics uses fine glass instead of wires to transmit huge amounts of information rapidly via light beams.
``This is not a situation where for me to succeed I have to take away from you,'' Estra said. ``This is an environment that just has to keep up''
Citing research from telecom research firm RHK Inc., Estra said some 350,000 terabytes now flow over the Internet each month, about 10 times the size of all the information stored in the U.S. Library of Congress. The demand is estimated to grow to one million terabytes a month by the end of the year and by 2003 will soar to 16 million terabytes a month.
``We're talking about growth rates that are staggering,'' he said. ``My guess is we're looking at a decade-long 'build-out'... From an investor's prospective, this is a long-term change.''
Still, industry leaders can ill afford to sit back as new technology is constantly emerging and making last year's miracles obsolete, Estra said.
``That's where acquisitions come in,'' he said. ``Corning and JDS are very good at identifying key technologies and integrating them into their own business.''
Corning, and JDS, which recently said it would buy SDL Inc., maker of fiber optic networks, for $41 billion in stock, have histories of buying technology and successfully integrating the companies.
``The companies that stake out key positions in this industry are not going to be able to do it internally,'' Estra said. ``More rapid growth demands the kind of management that can assess technology, acquire it and integrate it and thereby create value for their shareholders.''
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