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Corning Expects Strong Q420, but Gets Sued by Sakai
 
Corning reportedly set 4Q sales targets a bit higher than consensus, which is ~$3.15b, with the new target between $3.15b and $3.24b, or up between 5% and 8% sequentially.  Corning did not disclose which segment(s) are performing well.  While the company did not give specific 4Q guidance previously, they did indicate that they expected sales, net income, EPS, and FCF improvement in 4Q.  3Q saw sales up 16% sequentially. Corning and Sakai Display Products (SDP), which is the de facto owner of Sharp’s Gen 10 LCD fab in Sakai, Japan are involved in the early stages of a disagreement, which has reached the legal dimensions. Corning has a glass production facility on site and is the exclusive supplier of Gen 10 glass to the Sakai fab.  Under the long-standing contract, Corning’s glass facility production is exclusive to SDP until the point at which its contractual obligations to SDP are filled, when they can ship glass to other customers.  
 
The local media has indicated that there have been claims by SDP that Corning has sold glass to other customers without meeting SDP’s contractual needs.  In recent years the SDP fab has not been operating at full capacity and SDP may not have been fulfilling its own contractual requirements for glass from Corning.  However, recently, with the increase in large LCD panel demand, Sharp has seen an increase in sales and was one of few that saw a jump in m/m large panel sales in October.  The issue should be resolved amicably despite a filing by SDP in the Osaka District Court late last week (unconfirmed).