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To: Johnny Canuck who wrote (41115)	4/23/2004 12:53:54 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69979

UPDATE - Corning posts profit, forecasts strong 2nd quarter Thursday April 22, 6:17 pm ET By Ben Klayman (Recasts first paragraph, adds CFO, analyst comments, background, stock action, byline) CHICAGO, April 22 (Reuters) - Corning Inc. (NYSE:GLW - News) posted a profit on Thursday and forecast stronger-than-expected results in its current quarter as demand remained strong for its liquid crystal display panels used in laptops and desktop computers. ADVERTISEMENT Shares in the world's largest maker of fiber-optic cable surged more than 8 percent in after-hours trading following its strong first-quarter results and second-quarter outlook. "Corning had a huge quarter," said Needham & Co. analyst John Harmon, who has a "buy" rating on the stock and does not own the shares. "The LCD business is very strong and it's really driving all of the company's profits and then some." Corning has been weighed down for the past three years by slower spending in the telecom sector. It has responded by cutting costs, slashing jobs and selling or closing money-losing units such as some optical components businesses. While some suppliers have suggested demand has started to rebound, Corning repeated that it does not see growth in the telecom sector until 2005. It reported a first-quarter net profit of $55 million, or 4 cents a share, compared with a net loss in the year-ago quarter of $205 million, or 17 cents a share. Excluding one-time items, Corning earned 8 cents a share, topping analysts' estimates for a 5-cent profit according to Reuters Research, a unit of Reuters Group Plc. Corning's gross profit margin rose to 35.5 percent of sales, the highest level in three years, Corning Vice Chairman and Chief Financial Officer James Flaws told Reuters. The company expects that rate to be in the 34 percent to 35 percent range in the second quarter. Sales in the first quarter rose to $844 million, topping Wall Street's forecast of $804.9 million. That was up 13 percent from last year and up 3 percent from the previous quarter. However, about $10 million of the $24 million gain from the fourth quarter was due to favorable foreign exchange rates. The company expects those rates to remain stable in the second quarter. Corning's telecom business in the first quarter recorded a $43 million loss as sales fell 12 percent from the fourth quarter. Optical fiber sales volume in the quarter was 7 percent lower than in the previous quarter, slightly better than Corning's revised March estimate of a drop of 10 percent to 15 percent, due to strong March sales in North America. The weakness in telecom, however, has been offset by the surging demand for LCD glass used in computers as well as LCD TVs. First-quarter sales in the LCD business unit rose 16 percent from the fourth quarter as glass volume grew faster than expected, the company said. "It's pretty good now, so I don't want to jinx it," Flaws said. "We'd be very happy if it continued at this rate." Corning also forecast stronger than expected second-quarter results. It sees sales in the range of $900 million to $950 million, and earnings of 7 cents to 9 cents a share before one-time items. That is above the $838.3 million and 6 cents a share analysts had forecast according to Reuters Research. Corning expects to remain sold out of LCD glass in the second quarter and plans to add manufacturing capacity throughout the year. The company expects LCD glass volume to rise up to 15 percent in the quarter with stable pricing. For the year, Corning believes its LCD glass business will likely grow faster than the industry's expected 50 percent growth rate. It sees fiber volume in the telecom business rising as much as 15 percent with pricing declines of less than 5 percent. Corning's shares rose to $11.10 in after-hours trading on INET from Thursday's closing price of $10.25 on the New York Stock Exchange (News - Websites) .