LCD specialist Corning (NYSE: GLW ) came out with better-than-expected numbers recently, though its first quarter overall could have been better. Let's take a closer look at where things stand for the Gorilla Glass maker.
Shares rose on the company's earnings report, but even though Q1 revenue beat Street expectations, remaining flat at $1.92 billion, net income plummeted 38% to $462 million, mainly because of pricing pressures in its LCD division. Volumes did record a surprising improvement, and that was a welcome sign for the company's display-technologies division, which is responsible for LCD production. The former accounts for almost 90% of Corning's total net income.
Corning's problems in the LCD segment are pretty understandable, as LCD television and display manufacturers have been having a tough time of late. For example, LG Display (NYSE: LPL ) , one of the leading LCD display manufacturing companies in South Korea, recently reported a $113 million Q1 net loss, marking its third consecutive down quarter.
But there are a host of other reasons to feel optimistic about the financial health of LCD television manufacturers. And that should spell good news for companies like Corning.
Back on the growth path
According to research firm NPD DisplaySearch, consumer demand for televisions should improve this year. The quantity of LCD TV shipments is expected to grow by about 9% from the previous year to 225 million units. And there's always the possibility of an industry shakeup by the one of the most admired brands in the world: Apple (Nasdaq: AAPL ) .
There's increasing speculation that Apple will begin producing the so-called iTV in May or June, as foreign suppliers begin shipping specialty parts for the much-hyped television. So while Corning already manufactures a majority of the glass components used in Apple's iPhone, this potential new product may further drive sales of Corning's famed Gorilla Glass in the near future.
The Foolish bottom line
Corning had a poor first quarter, but there are enough reasons to be hopeful about the company's future profitability. And with smartphones and tablets all the rage, this is one company I'd keep a close watch on. Stay up with the latest news and analysis on Corning by adding it to your free Watchlist.
Corning may just be one of the great ways to profit from the booming demand for tablets and smartphones. To find out some other names, check out a completely free report from The Motley Fool called "The Next Trillion Dollar Revolution." Get it now while it's still free!