Corning tops estimates, lowers guidance

Corning reported first quarter 2001 earnings that beat Wall Street estimates by a penny as it lowered guidance for the year for the second time since March.

For the quarter ending March 31, Corning reported pro forma earnings per share [EPS] of 29 cents, up 6 cents year over year, on pro forma net income of $227 million. Net sales for the quarter totaled more than $1.9 billion. The increase was driven largely by improved sales in the company’s telecommunications unit, where revenues were about $1.4 billion, up approximately 35% year over year, excluding the effect of acquisitions.

Despite the strong numbers for the quarter, Corning lowered estimates for the remainder of the year, citing a slowdown in its business in North America.

“The primary reason for this change in guidance is related to the significant drop-off in demand for high-data-rate fiber in North America,” said John Loose, Corning’s president and CEO. “In the last few weeks, order cancellations and the project delays reached a level too great for us to overcome, despite the increasing demand overseas.”

For 2001, the company now expects an EPS of between 90 cents and $1.00 instead of the $1.20 to $1.30 it had earlier projected. Sales for the year are now expected to be between $7.8 billion and $8 billion, down from $8.2 billion to $8.5 billion.

For the second quarter, Corning now projects earnings of 18 cents to 21 cents.

To help offset the slowdown, Coring announced that it was laying off an additional 1000 workers in its Photonics Technologies unit.

Sales for the unit during the quarter were $208 million, down 35% from the fourth quarter of 2000. The unit posted a loss for the quarter and is not expected to be profitable this year.

The layoffs, which bring the total number of job cuts the company has made this year to about 4300, will come mostly from the company’s facilities in Bedford, Mass. and Erwin and Rochester, N.Y.