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To: Art Bechhoefer who wrote (19745)	3/20/2001 8:27:00 PM
From: puborectalis	Respond to of 60323

Corning CEO Calls Stock Valuation 'Nuts' By Timna Tanners ANAHEIM, Calif. (Reuters) - The chief executive of fiber-optic giant Corning Inc. (NYSE:GLW - news) on Tuesday called his company's low current stock price value ``nuts,'' but said it won't keep Corning from pursuing strategic acquisitions to broaden its product line. In an interview, John Loose told Reuters that nervous investors have sent Corning's stock price to levels unseen since October 1999, and that a weaker economy has forced the company to slow its pace of growth. ``A multiple of 20 on Corning is nuts,'' Loose said. ``I think investors are spooked.'' Like other fiber-optic communication equipment makers, Corning's stock has taken a nosedive in recent months as customers tighten their spending budgets for optical switches, components and fibers. Telecommunication companies have been short on cash and vulnerable to a weaker economy. Corning's stock fell 4.9 percent or $1.24 to $23.96, amid a weaker New York Stock Exchange (news - web sites) after the U.S. Federal Reserve (news - web sites)'s decision to cut interest rates by 50 basis points disappointed the market. Using 2000 earnings of $1.23 a share, Corning's price to earnings ratio was about 19.5. Shares of Corning have fallen from a high of more than $113 in September, when their price to earnings ratio was about 168, on 1999 earnings of 67 cents a share. Yet Corning executives remain convinced that long-term Internet usage growth will require increasing amounts of its optical product offerings in the future. Selective Acquisitions During the current economic uncertainty, however, the company is re-examining the short-term pace of its growth. Corning executives on Monday said the company may cut some projects and more staff, in addition to recent layoffs of 825 workers. ``A year ago we would have been in full-blown, fast-track mode,'' Loose said at the Optical Fiber Conference (OFC). ''Obviously things are different now. Certainly on discretionary spending it's a time when we are very mindful of costs.'' While a lower stock price can crimp takeovers, Loose said that a target company whose value has fallen in tandem with Corning would still be a good buy. Cash deals have become less attractive, he said, as the company focuses on its balance sheet and ensuring healthy cash flows. Stock deals, too, are more challenging because of the lower stock price, as well as the expectation that a stock deal should add to earnings within a year. Still, Corning would be interested in acquiring an attractively valued transmission laser company. Transmission lasers advance light signals on fiber optic cables. ``I've always said at some point we would have to fill the gap we think we have in transmission lasers,'' Loose said. ``In long-haul transmission fibers we have a modest position and would be open to an attractive acquisition.''