Corning lifts forecast for Q2 LCD glass volume

Specialty glass maker Corning Inc (GLW.N) raised its forecast for second-quarter sales of LCD glass, citing strong demand for flat-screen televisions especially in China.

Share reaction was muted, however, as analysts said investors had expected the move by Corning and were concerned that the improvement in demand might be short-lived.

"To some extent investors fear a repeat of what happened in 2008 when Corning was bullish in the first half but saw a fall off in demand for glass in the second half," said Morgan Keegan analyst Paul Bonenfant, but added that he did not agree with that view.

Corning kept its estimate for the global LCD market between 2.1 billion and 2.2 billion square feet of glass this year, but noted this forecast could be topped if strong demand for LCD TVs, particularly in China, continued.

Bonenfant said his estimate is for a market slightly above the high end of Corning's forecast for 2009 and he predicted a 15 percent increase in volume demand next year.

Corning shares fell 1.35 percent to $16.05 in morning trading on the New York Stock Exchange, in line with the broad market. The stock had risen nearly 1 percent in early trade.

The company expects second quarter LCD glass volume to double from the first quarter for its wholly owned business. It had already revised its outlook to a 75-percent volume increase at the end of May after originally forecasting a volume increase of more than 50 percent.

Corning also expects second-quarter volume at Samsung Corning Precision Glass Co., Ltd., its venture with Samsung Electronics (005930.KS), to be up about 50 percent sequentially compared with its previous target for a 40 percent increase.

"Second-quarter glass demand is much stronger than we anticipated even a few weeks ago," Corning Chief Financial Officer James Flaws said in a statement on Tuesday.

"While retail LCD TV sales growth in the United States had slowed somewhat in April after a very strong first quarter, reports that we have received indicate a significant upward spike in domestic LCD TV sales in late May and the first three weeks of June," Flaws added.