UPDATE 1-Corning warns of further fall in LCD glass prices

Tue Jan 28, 2014 2:15pm EST
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By Neha Alawadhi

Jan 28 (Reuters) - Specialty glass maker Corning Inc warned that prices of LCD glass would decline further in the current quarter, raising concerns about growth in its display business.

Corning shares fell as much as 9 percent on Tuesday.

"The one major concern investors walked away from the outlook was the pricing pressure in first quarter. Instead of being down 2-3 percent in the quarter versus the prior quarter, it's probably going to be down twice that amount," said analyst Steven Fox of Cross Research.

Core sales in Corning's display technologies business, which makes LCD panels for Sony Corp and Lenovo Group , fell 5 percent to $665 million in the fourth quarter.

The display business accounts for more than a third of the company's revenue.

Corning, best known for its Gorilla glass used in smartphones, said prices of LCD glass are expected to decline further this quarter as some contracts signed in 2012 require the company to match prices offered by rivals.

"We anticipate our price declines will return to more moderate levels after first quarter ...," Chief Financial Officer Jim Flaws said in an earnings call after the company reported better-than-expected quarter ended Dec. 31.   Continued...