When heated to a high temperature and then cooled, the new chemical composition can change the way glass behaves. For Gorilla Glass, Corning reduces the number of formulations to a few dozen, causes more melts, and then selects two or three candidates to test. It can take one to three years of testing to come up with the one formula that Corning ends up putting into the next generation of Gorilla Glass.
Corning The stock fell more than 4% Tuesday morning after the company reported a weaker-than-expected outlook for the current quarter, blaming sluggish smartphone glass sales.
Corning manufactures a variety of different components and supplies many of the best electronics companies, such as Samsung and appleWhich This week’s earnings reports Amid fears of slowing consumer electronics sales. But there is optimism that slowing electronics sales will not harm the high-end features in the market as much as less expensive devices.
Corning said it expects $3.55 billion in core or adjusted sales for the fourth quarter, contrary to the FactSet analyst consensus of $3.75 billion.
The company said it will wait until it sees positive signs before telling investors about the future recovery in the business.
Corning CEO Wendell Weeks said in an earnings call in the September quarter, Corning saw smartphone unit sales fall 14% year over year, and demand for tablets and laptops fell 17%. He added that the annual production of cars is also behind the previously expected pace.
“So the question now is, when will the glass market recover?” weeks asked. “My answer is that we would like to see additional positive evidence before we drive a strong recovery in glass demand.”
Corning’s largest business is manufacturing cables and components for fiber-optic systems, which grew 16% to $1.31 billion during the quarter.
But the company saw a 28% annual decline during the quarter to $686 million in sales in its Display Technologies division, which makes glass for smartphones and other computer screens.
Weeks said the slowdown in consumer electronics does not appear to be improving this year.
“We now expect smartphones to fall about 12% for the year, and we expect demand for laptops and tablets to fall by 15%,” Weeks said. “We expect the annual decline in smartphones, laptops and tablets to be larger in the second half than in the first.”
Corning reported third-quarter sales of $3.49 billion, under the FactSet consensus of $3.66 billion, and adjusted earnings per share of 51 cents, in line with expectations.
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