By Balasubramanyam Seshan: Subscribe to Balasubramanyam's RSS feed
July 27, 2010 3:01 PM EDT
Avian Securities raised its earnings estimates of Corning Inc., the world's biggest maker of glass for flat-panel televisions and computers, ahead of the company’s second quarter results. The brokerage maintained its price target of $25 on shares of Corning.
Corning is set to release its second quarter earnings results on July 28, where consensus estimate is currently 52 cents a share on revenue of $1.65 billion.
“Our estimate increase is based on higher than anticipated utilization rates at both large customer fabs and Samsung, and better overall glass volume assumptions based on second quarter panel capacity,” said Andrew Abrams, an analyst at Avian Securities.
While analyst expects Corning to post strong second quarter results, he is concerned that glass supply is returning to more balanced levels. While increased capacity and seasonal shipment increases should sustain Corning through 2010, declining average selling prices can eat into volume gains.
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The brokerage is not expecting substantial pricing pressure in third quarter, but would be more concerned about average selling prices in fourth quarter and beyond. The brokerage remains positive but sees the possibility of more difficult times ahead.
The risk to the analyst’s full year revenue estimates is pressure on glass average selling prices as the industry comes closer to balance. However the analyst sees this somewhat as offset by positive incremental momentum from Gorilla Glass.
The brokerage increased its second quarter EPS estimate of Corning to $0.53 on revenue of $1.67 billion from $0.49 on revenue of $1.64 billion, and its 2010 estimate to $2.08 on revenue of $6.51 billion from $2.02 on revenue of $6.45 billion. The brokerage changed slightly its third quarter EPS estimate to $0.53 and fourth quarter estimate to $0.50.
Corning shares at 10:55 am EDT were up 1.28 percent at $18.13 on the NYSE.
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