Specialty glass maker Corning Inc
Its shares rose some 4 percent after the largest maker of glass for liquid crystal display LCD screens said retail demand spurred Corning's TV-making customers to jump back into the market to replenish inventories.
The company, whose competitors include Japan's Asahi Glass Co Ltd <5201.T>, now expects second-quarter revenue, gross margins and profit to be significantly higher than the first quarter.
Corning joins technology bellwethers such as Google Inc
It was satisfying to see the continued strength of LCD TV sales at retail worldwide throughout the first quarter, said Chief Executive Officer Wendell Weeks. We were also pleased to see demand for our glass pick up sooner than we anticipated.
In an interview with Reuters Corning Chief Financial officer Jim Flaws added: We sense that things have in general begin to bottom out and there are some modest improvements taking place.
Corning's first-quarter net income fell to $14 million, or 1 cent a share, from $249 million, or 16 cents a share, the company said on Monday.
Excluding special items, Corning reported earnings of 10 cents a share, beating the analysts estimate of 5 cents a share, according to Reuters Estimates.
Total sales at Corning, which had closed some of its glass- making operations and shed jobs to shrink its underlying costs, fell 9 percent to $989 million.
Television manufacturers bought less glass in recent quarters after snatching up supply hoping for robust demand last year. While sales were good, many -- particularly in South Korea and Taiwan -- slowed their orders amid the global economic downturn.
Corning now says glass demand from panel makers in South Korea and Taiwan is on the rise.
I think as the quarter progressed, as people saw stronger sales at retail, that led them to say that they could take more risk ... and rebuild some inventories, Flaws said.
Citing strength of LCD TV sales, the company doubled its forecast for 2009 unit growth to 18 percent from 9 percent. In all, it now see total LCD glass market growing 5 percent to 10 percent compared with its original expectation of flat growth.
Corning now sees the total glass market growing 2.1 billion to 2.2 billion square feet this year, compared with 2 billion square feet last year.
Standard & Poor's Equity Research analyst Todd Rosenbluth upgraded his opinion on Corning to hold from sell after the results, citing the rosy outlook.
We believe continued improvement in display volume will help to support margin expansion, he said in a client note.
Corning's shares were up 4 percent at $15.98 in afternoon trading, after earlier hitting a session high of $16.36. As of Friday's close, shares had nearly doubled from a five-year low hit in December, but still well below its 52-week high of $28.06 last May.
(Reporting by Franklin Paul; Editing by Derek Caney and Andre Grenon)