Corning cuts spending plans in face of uncertainty

Corning Inc. said 7 October 2008 that it is maintaining its 3Q 2008 profit forecast, but the company“s chief financial officer said the global economic turmoil creates “significant uncertainty” for 2…

Corning Inc. said 7 October 2008 that it is maintaining its 3Q 2008 profit forecast, but the company“s chief financial officer said the global economic turmoil creates “significant uncertainty” for 2009 and that the company has taken steps to cut spending. In September 2008, Corning guided for 3Q earnings of between USD 0.43 to USD 0.45 per share excluding special items. However, in a statement, chief financial officer James Flaws said Corning plans smaller capital spending and has widened some sales estimates due to the global market crisis. The company, which makes products that include display glass used in flat screen televisions, said glass volume shipments rose 2% sequentially in the 3Q 2008, less than expected. The company widened its forecast for 2009 worldwide LCD market growth to a range of 15% to 25% from a prior forecast of 20% to 25%. Corning also said it expects to have 2008 capital spending of between USD 1.8 billion to USD 1.9 billion, a reduction of between USD 300 million to USD 400 million from original plans. For 2009, capital spending will be USD 1.6 billion to USD 1.7 billion, USD 100 million to USD 200 million lower than originally forecast. Mr. Flaws also said Corning has decided to delay construction and startup of a Taiwanese facility until later in 2010. The company has also stopped hiring from outside and is “preparing for capacity rationalization” if demand weakens, he said. “We are obviously in uncertain economic times. At Corning, we are making decisions now to be ready for the potential of a worsening economy”, Mr. Flaws said.