Corning Incorporated (NYSE:GLW) on Oct 29, 2008  announced results for the third quarter 2008.

Third-Quarter Highlights

• Sales were $1.56 billion, about even with last year's third quarter.

• Earnings per share (EPS) were $0.49; including net special gains of $36 million or $0.03 per share.

• Excluding special items, EPS was $0.46,* up 21% over last year's results, due in part to favorable exchange-rate movements.

• Display Technologies' combined LCD glass volume, including Corning's wholly owned business and Samsung Corning Precision Glass Co., Ltd. (SCP), was up 2% sequentially and 18% year over year. Volume from Corning's wholly owned business decreased 10% sequentially and 2% year over year. Samsung Corning Precision's volume increased 12% sequentially and 38% year over year.

Fourth-Quarter Outlook Summary

• Sales are expected in the range of $1.2 billion to $1.3 billion.

• EPS before special items are expected in the range of $0.20 to $0.28.*

• Combined LCD glass volume is expected to be down in the range of 10% to 20% sequentially, with the wholly owned business down 20% to 30% and SCP down 5% to 15%. Year over year the combined glass volume is expected to decrease by 2% to 13%

• For the full year, combined LCD glass volume growth is expected to be 20% to 22%.

"During the third quarter we experienced the impact of a supply chain correction in our display business. We believe that worsening economic conditions are now affecting retail demand for several of our businesses and that this economic decline may be accelerating in the fourth quarter. In response, we have initiated actions to reduce capital spending, scale back some manufacturing operations, curb the rate of growth in research, development and engineering expenses and reduce overhead to manage costs," Wendell P. Weeks, chairman and chief executive officer, said. "If business conditions deteriorate further, we will consider additional capacity and operational adjustments," he added.

*These are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tables following this news release, as well as on the company's investor relations website.
Quarter Three Financial Comparisons

Overview of Third-Quarter Segment Results
Third-quarter sales for Corning's Display Technologies segment were $696 million, a 14% sequential decline and flat with the third quarter 2007. Glass volume from Corning's wholly owned business decreased by 2% year over year and 10% sequentially. Price declines were in line with previous quarters. Compared to the second quarter, sales were negatively impacted by a weaker Japanese yen-to-U.S. dollar exchange rate.

Equity earnings from SCP's LCD glass business were $259 million for the quarter, a 6% sequential gain and a 62% increase over third-quarter 2007 results. SCP's quarterly glass volume increased 12% sequentially and 38% year over year, reflecting continued strength in the Korean LCD market.

"Although our combined glass volume reflects strong year-over-year growth in the LCD glass market, we have seen lower demand in Taiwan and stronger demand in Korea. This trend is expected to continue in the fourth quarter," Weeks said.

Telecommunications segment sales in the third quarter were $496 million, a 4% sequential increase and a 5% increase over a year ago. The sequential increase was the result of higher demand for private network solutions.

Environmental Technologies segment sales were $177 million for the quarter, a 15% sequential decline and an 11% decrease from a year ago. Sales were lower than expected in the third quarter due to continued weak automotive products demand in North America and recent market softness in Europe and the rest of the world. Heavy-duty diesel product sales continue to be depressed due to the slowdown in the U.S. freight shipping industry.

Specialty Materials segment sales were $101 million, a slight sequential decline and a 6% increase over the third quarter last year. The Life Sciences segment had sales of $83 million in the quarter, a 5% sequential decline and a 6% year-over-year increase.

Corning's third-quarter equity earnings were $382 million, up 6% sequentially and 60% year over year due to strong performance at Dow Corning Corporation and SCP. The company's equity earnings from Dow Corning were $109 million, a 16% sequential increase and a 35% year-over-year improvement. Equity earnings in the third quarter of 2008 included an $18 million charge at Dow Corning due to losses on cash and short-term investments. Equity earnings in the third quarter of 2007 included an $18 million restructuring charge at Samsung Corning Corporation.