(Reuters) - Specialty glass maker Corning (NYSE:GLW) Inc beat profit estimates for the first quarter on Tuesday as price hikes more than made up for higher raw material costs and a demand slowdown.
Shares of the company, whose Gorilla glass is used in smartphones of companies including Apple Inc (NASDAQ:AAPL) and Samsung Electronics (OTC:SSNLF), rose 2% in premarket trading.
Price increases meant that "profitability improved despite sequentially lower sales, which were impacted by recession-level demand in several key markets and overall weakness in China, as anticipated," CEO and Chairman Wendell Weeks said.
Core gross margin increased by 160 basis points sequentially to 35.2% in the first three months of the year, helping Corning post an adjusted profit of 41 cents per share that was more than expectations of 39 cents, according to Refinitiv data.
The company said it expects the pricing action and a recovery in the display technologies business to drive an increase in second-quarter sales and profitability.
Corning has seen demand slide from its consumer electronics customers in recent months as an uncertain economic outlook prompts consumers to cut back on non-essential spending.
IT research firm Gartner (NYSE:IT) estimates that shipments of personal computers and mobile phones will fall for the second straight year in 2023, with phone shipments slumping to a decade low.
Corning's core sales fell 10% to $3.37 billion in the first quarter, but they were better than estimates of $3.34 billion.
Revenue from its optical communications division fell 6% during the quarter, while sales in specialty materials business, which makes Gorilla glass, declined 18%.
Corning said it expects net sales between $3.4 billion and $3.6 billion for the second quarter, compared with analysts' estimate of $3.58 billion.