J Corning CEO Loose Says Co Will Weather Downturn >GLW
CORNING, N.Y. (Dow Jones)--Fiber optic maker Corning Inc. (GLW) has
weathered economic slowdowns in the '80s and '90s, and will rebound from the
recent slowdown in telecommunications spending as well, Chief Executive John
Loose said.
In an interview with Dow Jones Newswires, Loose said the company has
aggressively moved to reduce costs by cutting its work force by about 4,300
and trimming its capital spending by 20% in the last year. Loose earlier
spoke at the company's annual shareholder meeting during its 150th
anniversary celebration.
"Obviously, we've been taking a lot of action," Loose said. "I think we have
a great business model and a great hand and a very strong balance sheet.
This was a very sudden downturn in telecommunications spending. We are still
standing strong, and a lot of companies can't say that."
Recently, some of Corning's peers and customers, most notably JDS Uniphase
Corp. (JDSU) and Nortel Networks Corp. (NT), have again lowered guidance for
the ongoing quarter and the remainder of the year.
Corning has maintained credibility by being one of the first in the sector
to warn investors of softening demand earlier this year, Loose said. In
April, the company lowered its outlook for the remainder of the year.
The company has seen weakness from startup, long-haul telecommunications
service providers, he said. The company's fiber sales, however, have
remained steady or improved to key customer segments.
"Our fiber volume to cable providers is holding up," he said. "Volume to
international customers is up substantially. Volume to incumbent service
providers is up."
Responding to recent speculation that Corning would see additional price
pressures in Asia, Loose said, "I think we're very comfortable with the
guidance we've given everyone."
Much of the cuts to Corning's work force came in its optical components
business, which hasn't performed up to initial expectations.
The fundamentals driving the need for more robust carrier networks still
exist, he said.
"We are confident that Internet demand is doubling annually," he said.
Loose, like most executives in the telecommunications sector, couldn't
predict when North American carriers would resume spending.
"We are not putting plans in place that it will come back strong," he said,
referring to when spending growth resumes. "I don't think anyone knows if it
will come back strong or (resume gradually)."
-By Johnathan Burns, Dow Jones Newswires; 201-938-2020
(END) DOW JONES NEWS 06-21-01
03:23 PM |
