Sci/Tech

Corning shares jump on LCD glass deal with Samsung

CORNING, N.Y. (AP) — Shares of Corning Inc. jumped Tuesday after it announced a new tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately and guarantees that it will supply Samsung with liquid crystal display glass through 2023.

Corning, the maker of Gorilla Glass screens for smartphones and tablets, will acquire the South Korean company's 43 percent stake in Samsung Corning Precision Materials, an LCD glass joint venture in Korea, and will buy out other minority shareholders.

The joint venture makes glass substrates, the key material in high-end LCD televisions, monitors and mobile devices. In exchange for giving up its stake in the venture, Samsung Display will receive $1.9 billion worth of Corning preferred shares. It will also invest another $400 million in preferred shares of Corning. If converted, the shares would give Samsung Display a 7.4 percent stake in Corning. They are not convertible for seven years.

The transactions are expected to close in the first quarter of 2014. Corning said its board had also approved buying back $2 billion worth of its shares, which it expects will cover the dilutive effect of issuing preferred shares to Samsung Display.

Taking over the venture gives Corning immediate access to $1.2 billion in cash on the joint venture's balance sheet. The company believes it will add $2 billion in annual sales and 20 percent to earnings, excluding one-time items, in 2014 and 2015.

Part of the benefit comes from the share buyback as well as $100 million in expected cost savings in 2015. Shares of the Corning, N.Y.-based company rose 25 percent to $19.24 in after-hours trading. Corning also said Tuesday that it expects to earn 33 cents per share in the third quarter, excluding one-time items. That beats Wall Street's prediction by a penny. It also said revenue rose 5 percent to $2.1 billion, in line with analysts' expectations. The company will release full results for the July-September quarter on Oct. 30.

Related Headlines

  • Zebra to spend $3.45B on Motorola business

    Zebra Technologies will spend more than $3 billion to buy the enterprise business of Motorola Solutions in a considerable expansion that is both technological and geographical 

  • Netflix Launches in Brazil - Party

    Ahead of the Bell: Netflix

    Netflix shares edged up ahead of Monday's opening bell on news that the online video service had reached a deal with Comcast to ensure that its TV shows and movies are ... 

  • Michael Carpenter, Ally

    Is hot market for IPOs cooling?

    A hot market for initial public offerings may soon face a cooler reception from investors. IPOs are having their best start to a year since 2000. Eighty-nine companies have ... 

  • S&P 500 index logs its best week of the year

    The stock market closed out its best week of the year on Friday as investors focused on company earnings and brushed off another weak economic report. Campbell Soup climbed ... 

Find your future job here