Corning Sees Weaker Handset Market Through Second Half; TVs Slightly Up

Corning is projecting that a “weaker handheld and IT end-market environment” will persist through second half 2016, said Chief Financial Officer Tony Tripeny on Wednesday’s earnings call. As a result, Corning expects full-year sales in specialty materials to be “consistent with or down slightly from 2015, driven primarily by our performance in Q1.” Specialty materials volume slipped 2 percent in Q2 to $266 million as Gorilla Glass revenue for smartphones, tablets and laptop PCs “did not meet expectations," said Tripeny. “Tablets are bigger, so that has an outsized impact,” he said, saying the company scaled back the outlook for both smartphones and tablets. Profit in specialty materials grew 9 percent year over year on sales of Gorilla Glass 4, he said. Although IT and handheld device demand has slowed, “It has a small impact on the overall display market,” said Tripeny, saying “what really matters is what happens in TVs." Corning forecasts TV unit sales will increase 2 percent year over year and screen sizes will grow by 1.5 inches. In Q2, Corning's display segment grew 2 percent to $801 million, said a 10-Q SEC filing. CEO Wendell Weeks said market reports indicate 2016 TV unit growth may be softer than was expected at the beginning of the year, but screen size may be a bit larger than previously thought.