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Corning: 1Q nearly in line
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February 8, 2002: 12:46 p.m. ET
Optical networking firm says this could be worst quarter on road to recovery.
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NEW YORK (CNN/Money) - Optical networking company Corning Inc. said Friday that its first-quarter results were largely in line with analysts' estimates and that this could be the bottom for the business on its way to a recovery.
Shares of Corning (GLW: up $0.76 to $7.20, Research, Estimates) rose in Friday trading.
The Corning, N.Y.-based company said it expects to lose between 14 cents and 18 cents a share in the first quarter. Analysts surveyed by earnings tracker First Call expected Corning to lose 17 cents a share on average.
Corning also said it expected revenue of between $925 million and $950 million, compared with First Call's consensus analyst estimate of $944.25 million.
"Recognizing the many uncertainties about the broader economy, we are carefully walking the line between realism and optimism," Corning CEO John Loose said in a statement. "Although it appears that our revenue stream will improve as the year plays out, the pace and timing of recovery is uncertain."
The company, which is coming off three quarterly losses in a row, said it expected capital spending in 2002 of about $500 million.
In response to the company's statement Friday, Tim Ghriskey with Ghriskey Capital Partners, a Connecticut-based investment management firm that does not own Corning shares, said: "A lot of this has to do with the rebound in the economy and the rebound in demand for fiber optics. I'm glad that they see Q1 as the bottom for their business, but this is projecting into the future and who knows if that's really what ends up happening. It seems like a lot of speculation on their part."
Corning and other telecommunications and technology companies have suffered during the prolonged slowdown in business spending on capital improvements that followed the late-1990s spending bubble.
Last year, Corning cut 12,000 jobs, idled most of its plants at the end of the year, canceled or delayed expansion plans and reduced spending. But, the company resumed production last month at two of the five optical-fiber plants and plans to move forward with two more during the first quarter.
The company also said it expected to have "negative" cash flow in 2002, though it ended 2001 with $2.2 billion in cash and has an unused $2 billion revolving credit line available.
Still, "the company's cash and liquidity resources are ample to cover ongoing business requirements," Chief Financial Officer James Flaws said. 
--from staff and wire reports
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