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 5 percent, or 67 cents, to $12.74 in premarket trading Wednesday.
Corning job cuts to be modest
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. 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. He added that 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.
The company expects taking a charge of up to $50 million in the current quarter to cover the cuts.