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Glass giant sees bigger growth in auto filters

From Shanghaidaily| February 12,2007

CORNING Inc, the biggest maker of glass for liquid-crystal displays, sees its biggest growth opportunity in selling filters that help automobiles meet new United States emissions standards.

Sales in Corning's diesel technologies business will more than triple to as much as US$600 million a year by 2010, Senior Vice President Thomas Hinman told investors in New York on Friday. The unit recorded 2006 revenue of US$164 million, amounting to 3.2 percent of Corning's total sales.

Corning expects engine makers such as Cummins Inc and Caterpillar Inc to buy its filters after the US government in January implemented rules requiring heavy-duty vehicles to meet new air quality standards. Similar 2005 regulations in Europe bolstered sales to Volvo AB and DaimlerChrysler AG, while Corning also benefits from emissions rules in Japan.

"Diesel is coming in driven by the regulations," Hinman said in an interview with Bloomberg News. "We see this as a great build on top of the existing business we already have."

Shares in the New York-based company have climbed 15 percent this year.

Corning on Friday reaffirmed its first-quarter profit forecast of 24 cents to 27 cents a share on sales of US$1.26 billion to US$1.31 billion. The company said prices of LCD glass, Corning's biggest business, will fall as much as two percent from the previous period after dropping more than 20 percent last year.

Growth in the diesel business may enable Corning to counter price declines for glass used in flat-panel televisions and computer monitors.

Diesel technologies may increase by more than 60 percent this year in what Hinman called the "first significant growth opportunity" for the business. The spread of stricter regulations worldwide means investors will start paying attention, said John Krause, an analyst at Thrivent Financial for Lutherans in Minneapolis.

"If you've got regulations that require heavy-duty engines to use their type of filter system, there should be growth," said Krause, who helps manage US$65 billion, including 1.6 million Corning shares. "It should become a bigger part of the story here going forward."

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