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Now, Corning Cuts Back

Corning Inc. said it will temporarily idle the majority of its worldwide optical fiber manufacturing facilities as a part of an expanded restructuring program that will result in charges of up to $1 billion in 2001. Corning also said its earnings would fall short of analysts' expectations in both the third and fourth quarters.

In addition, permanent workforce reductions, including those previously announced, may reach 12,000 employees by the end of the year, company officials said in a statement released after Wednesday's stock market close.

Corning also said it is proposing to close its optical fiber manufacturing operation in Deeside, North Wales.

The company blames the deterioration of global economic conditions, "especially over the past few weeks." Coring has seen another drop in demand for optical fiber and cable as telecommunications carriers continue to curtail capital spending around the world.

"The telecommunications industry is experiencing an extremely difficult and challenging period,'' said John W. Loose, Corning president and chief executive officer.

Meantime, Corning said its third-quarter earnings will be in the $0.02 per share to $0.06 per share range, which is below expectations of $0.12, as reported by Thomson Financial/First Call. The company also said it expects to report a fourth-quarter pro forma net loss, although it did not reveal a specific figure. Analysts had anticipated that the company would report a profit of $0.09 in the fourth quarter, according to First Call.

While most of Corning's manufacturing capacity will be idled by late October, limited production at certain facilities will be maintained for customer responsiveness. Fiber manufacturing operations will resume in 2002 as business conditions improve.

Corning Cable Systems will also significantly reduce production at several optical cable manufacturing facilities. This operating plan will allow the company to match production with demand and significantly reduce inventories.