Corning issues Q3 downside guidance

Co issues downside guidance for Q3 (Sep), sees EPS of $0.43-0.45, excluding non-recurring items, compared to previous guidance of $0.48-0.51, vs. $0.50 First Call consensus; sees Q3 (Sep) revs of $1.58-1.62 bln, compared to previous guidance of $1.65-1.72 bln, vs. $1.7 bln consensus. Co sees Q3 gross margins of about 47%, compared to previous guidance of at least 50%. The guidance reductions are primarily related to lower-than-expected shipments of LCD glass in the co's wholly owned display business. "We continue to see evidence of ongoing strength in the retail market for LCD TVs, a key growth area for the LCD glass industry. However, the supply chain correction, as outlined in our second-quarter conference call, is taking longer than we expected. We believe that the set assembly portion of the supply chain built too much inventory in the first half of this year. As set assemblers have continued to hold back on orders, panel makers have lowered prices and reduced utilization rates to balance the supply chain. We think these utilization cutbacks will continue into September in Taiwan. As a result, we now expect third-quarter sequential volume for Corning's wholly owned display glass business to be down about 5% versus our previous guidance of flat to up 5%."