Corning Stock Slides on Weak Outlook. The Glass Maker Cut Staff by 2.5%.

Corning
said that it expects sales in the March quarter, its first fiscal quarter, to decline “more than seasonally” due to the issues in China, and added that it “took actions to increase price and improve productivity” during the fourth quarter, including the work force reductions. The company said the job cuts were spread across the business. Corning said it continues to feel pandemic-related effects on the television, automotive, smartphone, and IT end markets.

“I’m pleased with the sales growth we continue to deliver despite recession-level demand in markets constituting about half of our sales,” Corning CEO Wendell Weeks said in a statement. “However, our profitability and cash flow have lagged sales growth as a number of pandemic-driven effects continue to ripple across the global economy. In response, we took significant additional price and productivity improvement actions in the fourth quarter that will improve margins and cash generation starting this year.” 

Corning shares fell 4.2% to $34.88.

For the December quarter, Corning posted “core” sales of $3.63 billion, down 2% from a year earlier, but at the high end of the company’s guidance range of $3.45 billion to $3.65 billion. Adjusted profit was 47 cents a share, likewise at the high end of the company’s target range of 41 cents to 47 cents. Wall Street consensus had called for $3.55 billion in core revenue and adjusted profit of 44 cents a share.

Under generally accepted accounting principles, Corning had sales of $3.4 billion, down 7% from a year ago, and a loss of 4 cents a share, largely reflecting restructuring charges related to the job cuts. 

For the full year, Corning reported core sales of $14.8 billion, up 5%, and GAAP sales of $14.2 billion, up 1%. Profit was $2.09 a share on an adjusted basis, up 2 cents from a year earlier, or $1.54 a share under GAAP, up from $1.28.

Corning said fourth-quarter sales in its display glass segment, which provides glass for TVs and monitors, were down17% on a year-over-year basis, but up 14% from the third quarter. Optical communications sales were down 1%, but off 9% sequentially. The company’s specialty materials unit, which makes smartphone cover glass, saw sales fall 3% both year over year and quarter over quarter. 

Corning’s environmental technologies business, which makes catalytic converters for cars and trucks, was up 12% from a year ago, but down 7% from the third quarter on weak truck sales in China. The company’s life sciences business saw sales fall 7% from a year ago, and 6% from the third quarter on lower demand for Covid-related products. The company’s best performing unit was its Hemlock Semiconductor and emerging growth businesses segment, which grew 22% from a year ago, and 14% from the third quarter driven by strong demand for polysilicon for solar systems.

For the first quarter, Corning is projecting core sales of $3.2 billion to $3.4 billion, below analysts’ consensus of $3.58 billion, with core profit of 35 cents to 42 cents a share, falling shy of consensus at 47 cents. The company said it expects sales in the second quarter to improve from the first-quarter level.

Write to Eric J. Savitz at eric.savitz@barrons.com