Corning Inc. will continue to be a presence in the Rochester area through Corning Tropel and the Infotonics Technology Center Inc., but the Southern Tier firm has no plans to expand here, a top company executive said this week.
James Flaws, Corning’s vice chairman and chief financial officer, was in Rochester Thursday to speak at the Western New York Investor Conference. His talk focused on the company’s third-quarter results, its fourth-quarter projections and areas of growth.
In a telephone interview Wednesday, Flaws said the company continues to be pleased with Corning Tropel’s efforts.
Corning Tropel, located in Fairport, is part of Corning’s semiconductor materials group, working with other Corning sites that do similar work, including a facility in Canton, in the North Country.
Corning Tropel supplies optical materials, high-performance precision optics, optical-based metrology instruments and other solutions for the semiconductor industry.
Tropel Corp. was acquired by Corning in a $190 million deal in 2001. It employs some 200 people and Flaws said the number of employees is expected to stay the same. While the optics market fluctuates, Flaws said it has been improving over the past 18 months.
Locally, Corning’s presence is limited to Corning Tropel and the Infotonics Center in Canandaigua. The company in 2001 had planned to establish an $80 million Monroe Photonics Park plant in Henrietta, but the slowdown in telecom and fiber optics forced Corning to back out.
Corning also shut down its other local facility, Corning Rochester Photonics Corp.
Flaws said telecommunications was big business for Corning, generating $5 billion of its $7 billion in revenues in 2000. Shortly after, the telecom and fiber optics sectors crashed.
“It was a huge fall-off,” said Flaws, noting that the company, like others in the industry, was hurt and had to close factories around the world.
After the crash, Flaws and others reviewed the situation to see if there was something they missed but said the change happened quickly.
For example, the optical fiber business grew from 1980 to 2000, before collapsing in 2001. Corning’s optical components division doubled from 1996 to 2000. But within 18 months, revenues dropped 94 percent from around $1 billion to $60 million.
Today, telecommunications makes up some $1.3 billion of Corning’s sales, considerably less than the profits it brought in a few years ago.
Flaws, who has been with Corning since 1973, said that since the telecom industry is not growing, the company is focusing on other areas.
There continues to be a demand for liquid crystal display products and fourth-quarter volumes should increase 3 percent to 10 percent. For this year, he expects the LCD/glass business to increase 56 percent to 70 percent because of demand for flat-panel monitors. Over half of the new monitors sold have LCD screens, Flaws said.
“We are seeing significant retail pricing declines this quarter, which is a very positive trend as we head into a typically strong consumer electronics buying season,” Flaws said, noting that while some LCD panel makers recently announced plans to delay their capital expansions, it was not an unexpected industry development. “Our manufacturing installations are extremely modular in design and can easily be adjusted to minor fluctuations in the market.”
In October, Corning announced it would expand its LCD substrate facilities in Taiwan.
The company also is focused on its fiber-to-the-premises initiative, which is being done in conjunction with regional Bell operating companies, Flaws said.
Corning Cable Systems developed the Corning Connected Communities program to bring the benefits of optical fiber to homeowners by assisting homebuilders and developers in building fiber-optic infrastructure into their plans.
Residents can take advantage of activities such as online gaming, voice over Internet protocol and telecommuting.
Verizon Communications Inc. plans to bring the fiber-to-the premises project to more than 2 million homes next year. SBC Communications Inc. and Bell South Corp. also have made decisions to use fiber in their broadband projects, Flaws said.
Flaws affirmed the company’s fourth-quarter estimates. The company is comfortable with fourth-quarter ranges of $950 million to $1 billion in revenues and earnings per share of 10 cents to 12 cents before special items.
Corning reported third-quarter sales this year of $1 billion, its best report since the fourth quarter 2001.
Corning had $3 billion in revenues last year and expects to see a 20 percent increase this year, to $3.7 billion, Flaws said.
(firstname.lastname@example.org / 585-546-8303)
11/19/04 (C) Rochester Business Journal