Corning notes resilient LCD TV sales but unsure of recovery's pace

(AP Photo/ Lee Jin-man)

Corning (GLW) is a company that can get overlooked during the earnings deluge, but it is the largest maker of glass for LCD TVs and regularly posts revenues in excess of $1 billion per quarter.

Consequently, it's worth looking at because its take on what's happening to large-screen televisions provides a different angle on consumer spending, as one must either finance the purchase or be willing to give up a sizable chunk of cash.

For the most part, purchases are clearly discretionary and not a necessity. Note: I recognize some sports fans will differ on this point.

Sales did drop 18% from a year ago to $1.4 billion and adjusted earnings fell 20% to 39 cents per share in 2Q, seven cents ahead of the First Call/Briefing.com estimate.

But in its press release, Corning said , "Global LCD television retail sales continue to be resilient during these challenging economic times. This gave confidence to the LCD supply chain to rebuild inventory during the second quarter.”

Though increased demand was first met by supplies that were already on hand, Corning eventually restarted some idled glass melting capacity to help "meet the industry’s increased appetite."

The company noted that the resurgent demand for LCD glass is propelling it to "restore much of our previously idled production capacity as quickly as possible to meet our customers’ needs.” And it bumped up its forecast for LCD glass market volume this year due to the "vitality of LCD TV sales in the first half of the year."

Corning went on to say that it is seeing signs that the impact of the global recession may be moderating but questions pertaining to the pace of economic recovery remain.  Shares are lower.

Separately, Bloomberg News reported last week flat-panel maker LG Electronics posted record quarterly profits that were fueled by demand for LCD TVs.