Bloomberg News

Corning Jumps After Samsung Display Deal, $2 Billion Buyback (1)

October 23, 2013

Corning Inc. (GLW:US), the maker of glass for televisions and mobile devices, jumped the most in nine years after approving a $2 billion buyback and agreeing to purchase full ownership of a Samsung Electronics Co. (005930) joint venture.

Corning is acquiring Samsung’s 43 percent stake in Samsung Corning Precision Materials Co., which makes glass for liquid crystal displays in South Korea, according to a statement yesterday. As part of the agreement, Samsung’s display business is buying new convertible shares of Corning with a value of $1.9 billion and making an additional $400 million investment.

The deal helps Corning capitalize on surging demand for mobile displays, fueled by sales of tablets, smartphones and other handheld gadgets. The Corning, New York-based company is counting on its scratch-resistant Gorilla Glass products to make further inroads in the market. The Samsung deal also gives Corning access to $1.2 billion of the joint venture’s cash.

“This affords us greater flexibility in servicing customers, managing capacity, and minimizing capital spending as we expand production of Corning Gorilla Glass and pursue new specialty glass applications,” Chief Executive Officer Wendell Weeks said in the statement.

Corning shares rose 14 percent to $17.55 at 9:47 a.m. in New York. The stock climbed as high as $18.07 earlier in the session, marking the biggest intraday jump since April 2004. Corning was already up 22 percent this year through yesterday.

The $2 billion buyback will last until the end of 2015, assuming the Samsung deal is approved. Samsung’s total investment in Corning will result in ownership of about 7.4 percent, according to the statement.

Corning also delivered preliminary third-quarter results yesterday. Excluding some items, earnings rose 18 percent to 33 cents a share, the company said. That topped the 32 cents estimated by analysts (GLW:US), according to data compiled by Bloomberg.

Sales climbed 10 percent to $2.1 billion, matching analysts’ projections.

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • GLW
    (Corning Inc)
    • $21.95 USD
    • 0.27
    • 1.21%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus