(By Balaseshan) Specialty glass and ceramics maker Corning Inc. (NYSE: GLW) reported a 42% drop in quarterly earnings due to lower equity in earnings of affiliated companies. However, earnings and revenue exceeded Street's expectations, sending its shares up 3.37% in premarket.
Earnings per share for the fourth quarter fell 39% to $0.19. Excluding special items, earnings per share rose to $0.34 from $0.33.
Sales increased 14% to $2.15 billion.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.32 per share on revenue of $2.07 billion for the fourth quarter.
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Specialty Materials sales were up 68% year over year, driven by strong growth in consumer sales of handheld and IT devices containing Corning Gorilla Glass, which can now be found on more than 1 billion devices worldwide, the company said.
Telecommunications sales rose 10% year over year, while sales in the Display Technologies segment were up about 3%.
Dow Corning Corp.'s equity earnings were down 33% on a year-over-year basis, driven by weak results in the sales and production of polysilicon for the solar industry.
Equity in earnings of affiliated companies fell to $93 million from $321 million. The latest quarter results included restructuring and asset impairment charges related to workforce reductions and asset write-offs at Dow Corning, and an impairment charge related to asset write-offs Samsung Corning Precision Materials.
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"We are not without challenges in 2013 as we continue to face an uncertain global economy, but we enter the year with prospects for growth in Specialty Materials, Telecommunications, Environmental Technologies and Life Sciences. In our LCD glass business, we expect our market share to be stable, and price declines to be moderate," said James Flaws, chief financial officer of Corning.
Among the many macro-economic uncertainties the company face is the valuation of the Japanese yen versus the U.S. dollar. While beyond control, the recent sharp depreciation of the yen could negatively impact Corning's reported net earnings if the present level holds or the currency depreciates further in 2013, the company said.
"We are evaluating ways to potentially mitigate the impact of any further weakening in the yen-to-dollar exchange rate. The positive market trends in our major businesses should drive demand for all of Corning`s existing and emerging technologies, creating terrific opportunities for us," Flaws concluded.
GLW closed Monday's regular session down 0.74% at $12.15. The stock has been trading between $10.62 and $14.58 for the past 52 weeks.