Japanese quake shuts down Corning LCD glass plant

James Flaws, Corning vice chairman and chief financial officer said glass-making operations at the Shizuoka facility are currently halted and likely to remain suspended for some time. Flaws said reports indicate that no Corning employees were injured.

"We are assessing options to meet customer demand and accelerating the restart of idled glass melting tanks at other facilities," Flaws said.

Corning (Rochester, N.Y.) said lower glass volume as the result of the shutdown would lower its third quarter sales by approximately $65 million.

The New York Times reported Tuesday that the quake measured 6.5 on the Richter scale. The quake struck at 5:07 a.m. Tuesday off the coast of Shizuoka, 90 miles southwest of Tokyo, according to the report, which cited the Japan Meteorological Agency.

C.J. Muse, an analyst with Barclays Capital, said the shutdown will have an obvious impact on Corning's third quarter shipments and that speculation that Corning could raise its third quarter sales and earnings targets next month is now of the table.

On the bright side, Muse noted that the shutdown in Shizuoka does remove glass capacity from the industry heading into what is traditionally a seasonally weak period and should support glass pricing potentially through the end of the year.

"It is clear that glass volume at our wholly owned business will be lower than originally planned for the third quarter," Flaws said. "At the present time it does not appear that this outage will have a material impact on our fourth-quarter shipments based on our current view of the market."

Corning now estimates that sequentially volume at the company's wholly owned business will be down between 5 and 10 percent in the third quarter, down from an original expectation of flat to up slightly compared with a strong second quarter, Flaws said.

Corning's other LCD glass manufacturing operations, including those at Samsung Corning Precision Glass Co. Ltd., and its Sakai City plant were not affected by the earthquake, the company said.