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Corning Q2 profit misses estimates over low Gorilla Glass demand

Corning reported second-quarter core earnings below analysts’ average estimate, hurt by lower demand for its Gorilla Glass, which is used in iPhones and Samsung Galaxy devices.

Corning shares fell as much as 10% on Tuesday.

Gorilla Glass sales fell due to lower demand for smartphones and tablets and a delay in the launch of certain new products, Corning’s senior vice president, Tony Tripeny, told Reuters.

The company cut its full-year growth forecast for cover glass shipments to 20 percent, chief financial officer James Flaws said on a conference call.

Flaws estimated that growth in the media tablet market had slowed significantly, compared with the company’s expectations at the beginning the year.

The company’s overall share of tablet sales is likely to fall from a year earlier, especially since most of the growth is in the unbranded tablet segment, which Corning is less exposed to, Flaws said.

Corning did not give its prior forecast for overall cover glass shipments, but had said in January that it expected shipments of Gorilla glass alone to rise at least 30% in 2014.

Samsung Electronics, one of Corning’s biggest customers, reported weak handset sales in the second quarter, as it faced slowing market growth and intensifying price competition.

Apple is also reportedly planning to switch from using Gorilla glass to GT Advanced Technologies’s sapphire glass for its next iPhone.

Shares of GT Advanced Technologies have more than tripled in the past year, while Corning’s shares have gained 43%.

Corning has also been hurt by falling LCD glass prices over the past few quarters, but said it expected prices to fall at a slower pace in the current quarter.

The company reported a rise in quarterly core net sales, helped by higher demand for TVs in the run-up to the FIFA World Cup.

Core sales from Corning’s display technologies business, which makes LCD panels for Sony, LG and Lenovo, and accounts for more than 25% of the company’s revenue, grew 62%.

Corning posted core earnings of 37 cents per share on core net sales of $ 2.58 billion, missing the analysts’ average estimate of a profit of 38 cents per share on revenue of $ 2.53 billion, according to Thomson Reuters I/B/E/S.

The company’s net income slumped 74% to $ 169 million, or 11 cents per share, in the second quarter.

Corning’s shares were down 9.5% at 19.96 in afternoon trading on the New York Stock Exchange.

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