Corning Incorporated (NYSE:GLW) announced third-quarter 2017 results on Oct. 24, detailing an impressive period led by the continued outperformance of the glass technologist's optical and specialty materials segments. In addition, Corning remains on track to meet financial targets laid out under its $22.5 billion strategic capital-allocation framework and offered an encouraging look at the rest of 2017.

Let's take a closer look at what Corning accomplished over the past few months.

Mutli-colored light shining through Corning optical fiber

Image source: Corning.

On revenue, earnings, and capital returns

Let's tackle the headline numbers first. Corning's third-quarter core sales grew 6% year over year to $2.7 billion. That translated to a slight increase in core earnings to $433 million, and 2% growth in core earnings per share to $0.43. 

For perspective, Corning doesn't offer specific guidance for revenue or earnings. But Wall Street was less optimistic, with consensus estimates predicting lower core earnings per share of $0.41 on revenue of $2.6 billion.

Corning Chairman and CEO Wendell Weeks stated:

We had an excellent third quarter. We are outperforming on sales, seeing the first returns on near-term growth investments, and making great progress on our longer-term growth initiatives. We expect to maintain this momentum and fully achieve our strategy and capital allocation framework goals.

Under that framework, which was unveiled in late 2015, Corning has set goals of returning at least $12.5 billion to shareholders through repurchases and dividends by 2019, while investing $10 billion toward sustaining its industry leadership and fostering new growth opportunities. So far, the company has bought back around $8.5 billion in shares, reducing its outstanding share count by 29% in the process. Corning also boosted its dividend by 14.8% in February and has promised to increase its payout by at least 10% annually through 2019.

Corning's segment results

Breaking things down a bit further, Corning's display technologies segment saw core sales fall 9% year over year to $860 million, as slightly better-than-anticipated volume in the LCD glass market was offset by an expected moderate decline in LCD glass prices. Display technologies segment core earnings fell 16% to $227 million. 

Meanwhile, Corning's now-largest segment is optical communications, where the company recently reached a milestone of 1 billion kilometers of optical fiber sold. Optical net sales jumped 15% year over year to $917 million, above guidance for growth of "at least 10%" and driven by demand for enterprise and carrier products. Optical segment core earnings grew 13% to $111 million. 

Next, Corning's specialty materials business increased sales 26% year over year to $373 million, significantly above guidance for growth in the low to mid-teens, thanks largely to strong shipments of Gorilla Glass. Specialty materials core earnings skyrocketed 61% to $71 million. 

During the subsequent conference call, Weeks also teased that Corning is "getting some really nice positive surprises right now in automotive interiors," specifically with the adoption of Gorilla Glass for Automotive on over 25 auto platforms so far. 

Relatedly, Corning's environmental technologies segment revenue climbed a slightly better-than-expected 5% year over year to $277 million, driven by worldwide automotive market growth and market share gains for Corning's legacy ceramic substrate business. Corning also celebrated the first commercial sales of its new gas particulate filters (GPFs), which came as the first phase of new Euro VI regulations went into effect. During the call, Weeks noted that the GPF business should exceed $500 million in annual sales, with similar margins and returns on invested capital as its existing businesses.

At Corning's life sciences division, revenue climbed 4% to $223 million, with flat earnings of $21 million -- both in line with expectations. Note that this excludes sales of Corning's Valor Glass pharmaceutical packaging business, which was launched in July and has yet to be fully commercialized. Rather, Valor Glass is still included under Corning's small "other" reporting segment, along with other new products and early opportunities.

Looking ahead

Again, Corning doesn't provide investors with specific consolidated revenue or earnings guidance. But management does clarify broader expectations for each of the company's business segments.

In the display technologies segment, LCD glass market and Corning volume trends should remain relatively consistent on a sequential basis. LCD glass prices should also remain consistent with the the third quarter's pace, and the company is still happy with its ability to deliver stable returns from this large business.

Next, Corning expects optical sales for the full year to increase more than 15% over 2016. According to CFO Tony Tripeny, optical communications is now on track to be a $5 billion annual business by 2020.

At specialty materials, Corning sees sales growth increasing in a low to mid-teens percentage range, a deceleration mostly owed to its lapping of a particularly strong fourth quarter of 2016, as OEM adoption began to ramp up in earnest for Gorilla Glass 5.

Finally, life sciences sales are expected to climb in a mid-single-digit percentage range in the fourth quarter, and environmental technology sales should rise in a low-teens percentage range on a year-over-year basis. 

In any case, and any way you measure it, this was a solid quarterly win from Corning, followed by an optimistic outlook. Even with Corning stock now up more than 30% year to date, I suspect there will be more market-beating returns to come for patient, long-term investors.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Corning. The Motley Fool has a disclosure policy.