FILE - In this Aug. 30, 2012 file photo, a man demonstrates the new Samsung Galaxy Note II smart phone during a media preview at the Samsung stand at the IFA consumer electric fair in Berlin. Corning Inc., maker of the Gorilla Glass featured on many mobile devices, including the Galaxy Note II, on Tuesday, Oct. 22, 2013 announced a tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately and guarantees that it will supply Samsung with liquid crystal display glass through 2023. (AP Photo/Markus Schreiber, File)
FILE - In this Aug. 30, 2012 file photo, a man demonstrates the new Samsung Galaxy Note II smart phone during a media preview at the Samsung stand at the IFA consumer electric fair in Berlin. Corning Inc., maker of the Gorilla Glass featured on many mobile devices, including the Galaxy Note II, on Tuesday, Oct. 22, 2013 announced a tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately and guarantees that it will supply Samsung with liquid crystal display glass through 2023. (AP Photo/Markus Schreiber, File)
CORNING, N.Y. (AP) — Shares of Corning Inc. jumped Tuesday after it announced a new tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately and guarantees that it will supply Samsung with liquid crystal display glass through 2023.
Corning, the maker of Gorilla Glass screens for smartphones and tablets, will acquire the South Korean company's 43 percent stake in Samsung Corning Precision Materials, an LCD glass joint venture in Korea, and will buy out other minority shareholders.
The joint venture makes glass substrates, the key material in high-end LCD televisions, monitors and mobile devices.
In exchange for giving up its stake in the venture, Samsung Display will receive $1.9 billion worth of Corning preferred shares. It will also invest another $400 million in preferred shares of Corning. If converted, the shares would give Samsung Display a 7.4 percent stake in Corning. They are not convertible for seven years.
The transactions are expected to close in the first quarter of 2014.
Corning said its board had also approved buying back $2 billion worth of its shares, which it expects will cover the dilutive effect of issuing preferred shares to Samsung Display.
Taking over the venture gives Corning immediate access to $1.2 billion in cash on the joint venture's balance sheet. The company believes it will add $2 billion in annual sales and 20 percent to earnings, excluding one-time items, in 2014 and 2015.
Part of the benefit comes from the share buyback as well as $100 million in expected cost savings in 2015.
Shares of the Corning, N.Y.-based company rose 25 percent to $19.24 in after-hours trading.
Corning also said Tuesday that it expects to earn 33 cents per share in the third quarter, excluding one-time items. That beats Wall Street's prediction by a penny. It also said revenue rose 5 percent to $2.1 billion, in line with analysts' expectations. The company will release full results for the July-September quarter on Oct. 30.
Associated PressSource: http://hosted2.ap.org/APDEFAULT/495d344a0d10421e9baa8ee77029cfbd/Article_2013-10-22-US-Corning-Samsung/id-da7117c1b6084aac85d3a88e429b1e3eCategory: Emmy Winners 2013 olinguito H&m
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