Corning Incorporated (NYSE:GLW) today announced that production at its LCD glass manufacturing facility in Shizuoka, Japan was disrupted by the earthquake that occurred in Honshu yesterday.
"We are relieved that initial reports indicate no Corning employees were injured," James B. Flaws, vice chairman and chief financial officer, said. "However, our glass-making operations at the facility are currently suspended and we believe they will remain so for some time. We are assessing options to meet customer demand and accelerating the restart of idled glass melting tanks at other facilities. It is clear that glass volume at our wholly owned business will be lower than originally planned for the third quarter. At the present time it does not appear that this outage will have a material impact on our fourth-quarter shipments based on our current view of the market. We will update investors on any significant changes to this outlook."
"Our adjusted estimate now places sequential volume at our wholly owned business to be down between 5% and 10% in the third quarter, versus our original expectation of flat to up slightly, following a particularly strong second-quarter performance," Flaws added.
Corning did not provide specific sales guidance for the third quarter, but the company did note that the lower glass volume would have a negative impact on sales by approximately $65 million.
Corning's other LCD glass manufacturing operations, including those at Samsung Corning Precision Glass Co. Ltd., and its Sakai City plant were not affected by the earthquake.
"While it is easy to get discouraged by events that are out of our control, we are equally encouraged by our July results, which came in stronger than we anticipated. We saw continued growth in our other businesses, including our equity company Dow Corning Corporation, which further strengthened our belief that the impact of the global recession may be moderating," Flaws concluded.