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Corning (GLW)
Corning Anticipates Significant Growth in LCD Glass Sales
Corning Incorporated (GLW: Charts, News, Offers) announced today that it expects second quarter LCD glass sales to be double its first quarter totals. The specialty glass maker anticipates that demand will continue to improve even into the third quarter. Corning speculated further by adding that third quarter orders will probably surpass the company's manufacturing capabilities. These forecast adjustments are after it predicted a 50% sales increase back in May. What is causing Corning's better-than-expected sales numbers?
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| Stock Analysis |
Corning Incorporated has been gradually reducing the prices of its LCD glass. These recent price reductions seem to have sparked a surge in flat screen glass demand from manufacturers. Corning has been focused on lowering its glass prices since late last year, and it seems committed to continuing this trend. However, the world's largest maker of liquid-crystal-display glass did admit that its price adjustments this quarter were minor compared to its first quarter price cuts. Corning's latest influx in demand has allowed the company to move remnant inventory from last year's fourth quarter. Corning Incorporated has streamlined its current inventory to a more efficient capacity level now that its left over glass has been accounted for.
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Corning's combination of declining glass prices and more efficient inventory forecasting has helped generate its recent boom in demand. In addition, Corning Incorporated is seeing great results from its venture business endeavor with Samsung Electronics. Samsung Corning Precision Glass Company, Ltd. is anticipating a 50% increase in sales during the second quarter, a 10% improvement from its previously expected sales numbers. Samsung's success in the consumer flat screen television market seems to be trickling down the production chain, and Corning Incorporated could not be more pleased.
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Overall, Corning has experienced an extremely positive growth in LCD glass sales. The specialty glass maker appears to be headed in the right direction for a turnaround after a rocky conclusion to its 2008 fiscal year. However, the big concern for Corning is whether or not it will be able to capitalize on the anticipated high demand. In an attempt to do so, Corning is reinstating previously shut down melting tanks in order to produce more glass. Only time will tell if this effort will be enough to match the upcoming third quarter sales in a profitable and effective manner.
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