Corning May Cut Jobs
NEW YORK (AP) -- Corning said Wednesday that it will likely cut costs, which may include "modest" job cuts, to support profit in a weakening economy.
It's the latest manufacturer to warn that the slowing global growth is hurting its business. Weaker global growth hurt Corning's telecommunications and environmental technologies divisions, but the company said sales of its super-strong Gorilla glass, used in tablets, TVs and other devices, were much better than expected.
The glass and ceramics maker's stock slid 9.4 percent, or $1.26, to close at $12.15 Wednesday.
The Corning, N.Y., company's third-quarter net income dropped 36 percent to $521 million, or 35 cents per share, from $811 million, or 51 cents per share, a year ago. Adjusted profit was 34 cents per share.
Revenue fell 2 percent to $2.04 billion in the July-September quarter.
Despite declines, profit and revenue still topped Wall Street expectations.
""The weakening economy is affecting sales in many of our businesses, with several not achieving the growth expectations we set for the year," said Corning Inc. CFO James Flaws. Higher expenses also hurt profit.
The company expects economic woes will continue next year, and that it will probably have to cut costs to grow profits. Savings will probably come from scaling back project spending, capital expenditures and from job cuts.
No decisions have been made on where the job cuts would be, said Corning spokesman Dan Collins. The company has operations in the U.S., China and other Asian countries, Europe, Latin America and the Middle East.
The company expects to take a charge of up to $50 million in the current quarter to cover the cuts.
In the July-September quarter, price declines for LCD glass weighed on Corning's display technologies division, the company's largest by revenue, where sales dropped 6 percent. The company expects glass volumes may drop further in the current quarter.
Lower North American sales, due to the end of the U.S. government's stimulus spending and project delays, and faltering demand in Europe dragged revenue for the telecom division down 7 percent.
Sales in the division that includes Gorilla glass shot up 21 percent.
Declining demand for trucks hurt the company's environment technologies unit, whose products include diesel filters and emissions products for autos. Sales dropped 6 percent.