Corning Incorporated (GLW -0.23%) is set to release third-quarter 2018 results on Tuesday. With shares up nearly 20% from their 52-week lows thanks to its impressive beat-and-raise performance in late July, the glass technology leader has plenty to prove when its report hits the wires.

In particular, the market will be watching closely for signs of accelerated sales growth and margin expansion as Corning kicks off the second half. So let's take a closer look at the expected underlying drivers of those improvements, as well as what else investors should be watching in the coming months.

Two Corning scientists looking a pane of bending glass


What to expect: Corning's headline numbers

Corning doesn't provide specific consolidated guidance. So while we don't usually pay close attention to Wall Street's demands, note that most analysts are anticipating revenue of $3.01 billion, up 11.3% year over year and accelerating from last quarter's 9% growth. On the bottom line, that should translate to a roughly 14% increase in core earnings per share to $0.49, swinging sequentially from a 3% decline last quarter.

Of course, we aren't flying completely blind here. Three months ago, Corning increased its full-year guidance to call for 2018 core sales of $11.3 billion, up 10% year over year, while pledging that margins would rise in the second half as it realizes the fruits of several quarters of ambitious investments in expansion.

Corning CEO Wendell Weeks offered this additional perspective:

Optical communications, specialty materials, environmental technologies, and life sciences segments are all expected to continue to grow, and the pricing environment in display technologies is the best in more than a decade. Several of our largest-capacity expansion projects have exited the start-up phase, and production and efficiency rates are climbing. We expect a step-change in sales and profitability in the third quarter, and we plan to build on that going forward.

Corning's segment progress

Corning also provided some clarity on the expected trends this quarter for each of its various business segments.

For example, the company has endured years of annual price declines from display technologies -- think LCD glass substrates and related products -- with lower average sales prices pressuring margins as volume grows. But those annual price declines have steadily moderated over the past couple of years as well; paired with greater operating leverage and efficiency, they should reach what Weeks described as "the important milestone" of a mid-single-digit percentage decline this quarter, with continued improvements into 2019.

Corning sees sales growth from optical communications, now its largest segment, accelerating to 25% this quarter, including contributions from its recent $900 million acquisition of 3M's communications markets division.

Meanwhile, sales from environmental technologies (think ceramic substrates and particulate filters for the automotive industry) should remain strong, both as the industry shifts to Corning's premium products and as original equipment manufacturers prep for the full adoption of new European emissions regulations. For perspective, environmental sales climbed 21% year over year last quarter.

Next, in life sciences, Corning sees Q3 sales climbing by a mid-single-digit percentage amid strong demand for its laboratory equipment -- albeit decelerating slightly from last quarter's 11% growth.

And last but not least, Corning was a little more vague on its specialty materials segment (which notably includes its Gorilla Glass smartphone cover glass), calling for year-over-year sales growth despite a maturing smartphone market. For this, we can largely thank more customers adopting Corning's newest, higher-margin Gorilla Glass 6 products into their latest smartphone and tablet lineups.

Looking ahead

Finally, look for Corning to confirm that it remains on track with the goals of the four-year Strategy and Capital Allocation Framework it unveiled in late 2015 -- namely those of returning at least $12.5 billion to investors through dividends and share repurchases by 2019, and of investing at least $10 billion in the business toward capturing future growth opportunities.

Regarding the latter, last quarter Corning outlined specific goals for reaching $5 billion in annual optical sales by 2020, building its newer gasoline particulate filter business (within the environmental segment) into a $500 million business, doubling its mobile consumer electronics sales within "several years," growing its Valor Glass pharmaceutical packaging business from its relative infancy this year, and delivering stability while capturing newer categories in display in the coming years.

Here again, I suspect little has happened over the past few months that could derail those ambitious, broad-reaching goals. But you can be sure I'll be closely listening to Corning's comments on that tomorrow.