Corning Inc.'s third-quarter profit beat Wall Street's estimates and the specialty glass maker said its customers, the Korean panel makers, will pick up production in the fourth quarter, sending its shares up more than 6 percent.
Corning, which makes the liquid crystal display glass used in flat-screen TVs, said that Korean manufacturers Samsung and LG Electronics will boost their production in the holiday quarter. Weak demand for televisions have been hitting panel prices in recent quarters.
The upbeat comments on Korea were not expected by investors and moved Corning's share price on Wednesday, Corning's chief financial officer said.
"The fact we said Korea would be up was a surprise to people," said Corning's finance chief, Jim Flaws, in an interview.
The CFO's comments are in line with LG Electronics comments when they reported their earnings earlier in October. LG said that display shipments would increase in the fourth-quarter and that decline in panel prices was going to be limited.
Flaws also said that retail demand for TVs was improving and that panel makers would soon be buying more glass after months of inventory reductions. He said retail demand was up 13 percent this year.
"As retail, TV sales have been doing fine. We think we will get through that inventory reduction and assuming that retail continues at the pace we've seen this year, it would give us volume increases," Flaws said.
Corning's positive comments on TVs contrasts starkly to German drugs and chemicals group Merck KGaA which also makes liquid crystal for display screens and cut the top end of its 2011 sales forecast on Wednesday because of weakness in the next two or three quarters in the flat screen industry.
Corning on Wednesday said it received a boost from the strong Japanese yen, and Flaws said the strong currency "will probably help us again in the upcoming quarter."
Besides LCD glass, Corning makes resilient glass covers for touch-screen devices such as smartphones and tablets. That segment increased 90 percent to $299 million in the quarter.
Corning, which makes makes the liquid crystal display glass used in flat-screen TVs, reported earnings per share of 51 cents, or $811 million, up from 50 cents per share, or $785 million, according to Thomson Reuters I/B/E/S. Sales increased 30 percent to $2.08 billion, which was ahead of analysts' estimates of $2.02 billion.
Adjusted for various charges related to taxes and restructuring, the company reported earnings per share of 48 cents, which beat analysts' expectations of 41 cents, according to Thomson Reuters I/B/E/S.
© 2013 Thomson/Reuters. All rights reserved.