Corning (NYSE:GLW) raised its fourth quarter sales forecast for Gorilla Glass. The company announced that it now expects sales of its market leading glass to increase 5% sequentially in the fourth quarter.  Earlier it had projected the glass sales to be in line with its third quarter sales. The company also raised its forecast for LCD volume shipment for the fourth quarter. As a result of these upward revisions, Corning’s stock gained nearly 7% in trading on Tuesday, November 27.
We have incorporated these revised projections and now have a stock price estimate of $13 for the company, approximately 5% above its current market price.
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Gorilla Glass continues to move from strength to strength
Corning’s Gorilla Glass is a market leading display surface for smartphones and tablets. The glass, which is present on more than 1 billion devices worldwide, will likely cross $1 billion in sales in 2012.  In the third quarter, sales in Corning’s specialty materials division which includes the Gorilla Glass increased 21% year-over-year to $363 million. 
Increase in volume of LCD glass shipment driven by North America and China
In addition, stronger-than-expected demand for LCD TVs and other consumer electronic devices in North America in the fourth quarter so far prompted the company to revise its full quarter forecast for LCD volume shipments. An increase in demand from China also contributed to this increase in forecast. Corning is looking to shore up its supply chain in China to meet the high consumer demand during the upcoming Chinese New Year holiday.
The company expects its LCD glass volume to grow in mid-single digits sequentially in Q4 compared to a decline of low-single digits it had forecast earlier. However, the continuing price decline in LCDs will impact this increase in shipment volume. Corning anticipates the price decline in Q4 to be more severe than in Q3 and expects the decline to continue into the first quarter of 2013.
All in all, the upward revision in fourth quarter sales forecast for Gorilla Glass and LCD shipment volumes indicates to the investors that Corning will be able to better withstand the tough global economic environment that has been impacting its business in 2012 so far.Notes:
- Company updates fourth-quarter outlook for LCD glass volume and Corning® Gorilla® Glass sales, November 27 2012, www.corning.com [↩] [↩]
- 2012 Q3 10-Q, www.corning.com [↩]