Keeping Corning's share price (ticker: GLW) near last Thursday's 19 since late 2005 have been a variety of investor worries. The high-tech glass maker had to turn itself into a producer of liquid-crystal displays, or LCDs, for TVs once its fiberoptic business collapsed. But wasn't any venture tied to TV sales bound to be cyclical, with volatile profitability? That seemed to be true recently, as cash-strapped couch potatoes were less willing to get up and shell out hundreds of dollars for more dazzling video hardware.
The newest worries are "valid but overstated," says Nikos Theodosopoulos, an analyst with UBS. There's no doubt that Corning depends on its LCD business, which now kicks in 45% of estimated 2010 operating revenues and all of its profit; its market share is 55%. Still feeling the effects of recession, LCD inventories recently rose to 17 weeks, about three weeks longer than usual. And Corning's earnings growth has flattened.