Corning Incorporated (NYSE:GLW) announced better-than-expected third-quarter 2018 results early Tuesday, highlighting broad growth from each of its various business segments, improving margins, and an increased full-year outlook.

After starting the day in the negative -- albeit primarily as the broader market pulled back -- shares of the glass technologist rebounded to gain nearly 2% on the day. Let's take a closer look at what drove Corning's latest quarterly beat, and what investors should be watching as we look ahead.

Scientist in white lab coat with blue gloves working on Corning glass products.

IMAGE SOURCE: CORNING.

On Corning's consolidated results, core sales grew 15.6% year over year to $3.05 billion, translating to 18% growth in core earnings to $476 million. After accounting for stock repurchases over the past year -- including $397 million in shares bought back this quarter alone -- core earnings per share increased 28% to $0.51.

As I noted in my earnings preview on Monday, Corning doesn't provide specific quarterly financial guidance. But both the top and bottom lines arrived comfortably above consensus estimates, which called for earnings of $0.49 per share on revenue of $3.01 billion.

Corning CEO Wendell Weeks called it an "excellent quarter," adding:

These results demonstrate a step change in our earnings power created by investments in innovation and capacity. Our annualized sales run rate now exceeds $12 billion, growth is accelerating, and our margins are expanding. Execution across the company is outstanding.

Broad-based strength

Digging deeper into Corning's segment results, display technologies net sales grew 7% year over year to $852 million, helped by higher volumes and a moderated mid-single-digit percent decline in annual display glass prices. Display segment net income climbed 3% to $218 million. 

Corning's optical communications business also saw sales soar 22% year over year to $1.117 billion, thanks to a combination of data center and carrier customer demand and the recently completed acquisition of 3M's communications markets division. Optical segment net income jumped 27% to $168 million, thanks to the benefits of capital investments in increased capacity.

Next, specialty materials sales jumped 23% year over year to $459 million, well ahead of Corning's expectations thanks to a "strong pull" for Corning's latest Gorilla Glass Variants as OEMs worked to deliver second-half product releases. Specialty segment net income climbed 35% to $116 million.

Meanwhile, environmental technologies sales grew 19% year over year to $331 million, driven by broad-based growth in ceramic substrates for both the automotive and diesel markets. Corning's gasoline particulate filters also contributed to growth with the help of new Euro 6 emissions regulations, which started in September. Better yet, operating leverage and strong manufacturing performance drove a 50% increase in environmental technologies net income to $60 million.

Finally, Corning's life sciences segment revenue climbed 4% to $231 million, outpacing the broader market's growth. Life sciences net income jumped 30% to $30 million, driven by manufacturing improvements.

On guidance

What's more, CFO Tony Tripeny told investors that Corning now expects to exceed its previous outlook, which called for sales to climb 10% year over year, to $11.3 billion. Corning also reiterated its expectation for gross margin to improve to 42% for the duration of the second half. 

"Having passed an inflection point, we are gaining momentum and plan to build on that going forward," Tripeny added. "Putting it all together, we are now seeing our four-year, $10 billion investment drive growth and extend our leadership."

Of course, Tripeny is referring Corning's goal of investing at least $10 billion in the business to capture future growth opportunities under its four-year strategy and capital allocation plan announced in late 2015. At the same time, Corning has returned $11.4 billion in capital to shareholders (en route to its goal of at least $12.5 billion) through dividends and repurchases.

All things considered, this quarter was as strong as any Corning investor could have hoped. And the company left plenty of room for excitement by teasing even greater strength as it leverages its investments in the coming months.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends 3M and Corning. The Motley Fool has a disclosure policy.