Corning Inc. (GLW) Wednesday reported an increase in profit for the first quarter, with its bottom line benefiting from lower tax expenses despite lower gross margins and a decline in revenues. Earnings for the quarter came in ahead of analysts' estimates, but revenues fell short.
New York-based Corning's first-quarter profit rose to $494 million or $0.33 per share from $474 million or $0.31 per share last year. Excluding special items, earnings for the quarter were $0.30 per share. Analysts polled by Thomson Reuters expected a profit of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.
Provision for income taxes for the three-month period was $34 million compared to $118 million last year.
Corning's sales for the quarter dropped to $1.81 billion from $1.92 billion last year. On an adjusted basis, sales were "similar to core sales" in the first quarter last year. Analysts had a consensus revenue estimate of $1.96 billion for the quarter.
Sales at display technologies division, which is Corning's largest business, fell 8 percent to $650 million, while LCD glass price declines were more moderate than the previous quarter.
CFO James Flaws said, "We stabilized earnings in our Display Technologies business, and going forward, we believe price declines will continue to be moderate as a result of the customer agreements we entered into last year."
Telecommunications segment sales decreased 7 percent to $470 million, while environmental technologies dropped 13 percent to $228 million from a year ago.
Sales at specialty materials unit, which produces the Gorilla Glass, declined 10 percent to $258 million from last year, while the segment profit surged 77 percent to $39 million, as sales of smartphones and tablets continued to strengthen.
Gross margins for the quarter dropped to 42 percent from 43 percent last year.
Corning raised its second quarter dividend to $0.10 per share, payable on June 28 as of May 31. Corning's board also authorized a share repurchase program to acquire up to $2 billion of its common stock.
GLW is currently trading at $13.80, up $0.67 or 5.10%, on the NYSE.
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