Corning Incorporated (NYSE:GLW) will release fourth-quarter 2016 results on Tuesday, Jan. 24, 2017. With shares up more than 44% over the past year, including a modest 4% climb since last quarter's solid report in October, you can be sure the market will be listening closely to what the glass technologist says. What should investors watch for this time around?

Corning's Gorilla glass holding up well under stress.

Corning's Gorilla Glass undergoing a stress test. Image source: Corning Incorporated.

Corning's headline numbers

For one, Corning doesn't typically offer specific quarterly financial guidance. But management did suggest that gross margin in the fourth quarter should be consistent with Q3 at around 43%, and up 1 percentage point year over year. Meanwhile, total gross equity earnings earnings should be between $75 million and $85 million. For further perspective -- and though we don't usually pay close attention to Wall Street's short-term demands -- analysts' consensus estimates predict Corning's revenue this quarter will climb 4% year over year, to $2.5 billion, and (with the help of share repurchases and cost-management efforts) translate to roughly 29% growth in earnings per share, to $0.44.

Investors should also look for confirmation that Corning remains on track with its ambitious capital allocation framework introduced in late 2015. Through 2019, Corning plans to not only invest $10 billion into the business through research, development, and engineering, but also to return over $12.5 billion to shareholders through dividends and share repurchases. As for the latter, Corning most recently set a goal to have returned $6 billion to shareholders by the end of 2016. 

A closer look

To that end, during each of its subsequent quarterly conference calls, management does provide color on what to expect from each of Corning's operating segments. 

Three months ago, for example, Corning stated LCD glass price declines should continue to moderate in Q4, extending what had become a nine-quarter trend to the benefit of its core display technologies segment. Relatedly, panel maker utilization should remain high while the glass supply market remains tight, so glass volume should remain roughly consistent with last quarter. 

Corning also expects high-single-digit percentage growth from optical communications. We should keep in mind, however, that revenue in optical communications climbed "just" 6% year over year last quarter, as strength in fiber-to-the-home was offset by weaker-than-expected sales growth related to hyper-scale data center projects.

"Note that our sales for our hyper-scale data centers range from $5 million to $10 million," explained Corning CFO Tony Tripeny last quarter, "so delay of a single project can reduce total segment growth by more than one percentage point. We remain well positioned to capture long-term growth in the hyper-scale segment."

Meanwhile, environmental segment sales are expected to fall in the low-single-digit percentage range, driven by weakness in demand for heavy-duty substrate products for trucks in North America and China. Conversely, sales in Corning's life sciences segment should be up in the low single digits.

Next, the smaller specialty materials segment was a strong outperformer relative to expectations last quarter. But that's not to say it was particularly impressive at first glance; specialty sales climbed 2%, while net income remained flat on a year-over-year basis thanks to a combination of both customer mix and launches of new cover glass products, including Gorilla Glass 5 and the Gorilla Glass SR+ wearables variant. With most of its launch spending now complete, profitability in the specialty materials business should demonstrate improvement in the fourth quarter. 

Putting it all together, and looking ahead

Finally, Corning should offer similar guidance for gross margin, total equity earnings, and for each of its individual segments in the current fiscal first quarter 2017, as well as a tentative look at what to expect for the year ahead. I suspect Corning investors can look forward to their company's continued stable performance as it positions itself for the future, all while rewarding patient shareholders with aggressive capital returns in the process.