Key Highlights

  • Core sales rose 19% to USD 5.08 billion, and core EPS rose 36% to USD 0.91.
  • Optical Communications sales rose 44% to USD 2.38 billion, with segment net income up 80% to USD 532 million.
  • Adjusted free cash flow was USD 661 million after USD 545 million of capital expenditures in the quarter.
  • Management guided fourth-quarter core sales to USD 5.2 billion to 5.3 billion and core EPS to USD 0.96 to 1.00.

Optical Drives the Quarter

Corning (NYSE:GLW) reported third-quarter core sales of USD 5.08 billion on Tuesday, up 19% from USD 4.27 billion, with core EPS of USD 0.91 against USD 0.67. Core gross margin widened 150 basis points to 40.5%, core operating margin widened 310 basis points to 22.7%, and core return on invested capital rose 330 basis points to 16.7%. On a GAAP basis, sales were USD 4.86 billion, up 18%, net income was USD 680 million and EPS was USD 0.78, up 56%, with a GAAP operating margin of 18.8%.

Optical Communications sales rose 44% to USD 2.38 billion. Enterprise Networks sales grew 84%, and generative AI product sales more than doubled, outpacing GPU unit growth. Carrier Networks grew 4% on data center interconnect and broadband demand. Chairman and Chief Executive Wendell Weeks tied the results to the company's Springboard plan, which aims to double the annualized sales run rate from USD 20 billion to USD 40 billion by the end of 2030. Management put the third-quarter run rate at USD 20.3 billion.

The company secured four long-term, multibillion-dollar customer agreements in the quarter, including with Verizon and AT&T.

Other Segments

Glass Innovations sales fell 3% to USD 1.51 billion and segment net income fell 10% to USD 328 million, as memory pricing weighed on consumer electronics. The finance chief said television units fell 4% and notebooks and handhelds fell about 20%. Management also announced a price adjustment for display glass substrates beginning in the fourth quarter.

Automotive sales rose 4% to USD 470 million on a recovery in North American heavy trucks that offset a 3% decline in light vehicles. Solar sales rose 37% to USD 436 million, with a net loss of USD 7 million as the production ramp ran slower than anticipated, though U.S. trade action under Section 232 improved the pricing environment. Life Sciences and Emerging Growth Businesses had sales of USD 290 million and a net loss of USD 28 million.

Cash, Capital and Outlook

Operating cash flow was USD 1.06 billion, and adjusted free cash flow was USD 661 million. Over nine months, adjusted free cash flow reached USD 2.27 billion after USD 1.3 billion of capital spending, with USD 639 million of customer deposits received upfront to fund committed capacity. Capital spending for 2026 is about USD 2 billion, mainly for optical capacity. Management named share buybacks as the main route for returning excess cash.

For the fourth quarter, management guided to core sales of USD 5.2 billion to USD 5.3 billion, about 19% growth, and core EPS of USD 0.96 to USD 1.00, about 36% growth. Management said opportunity in data center interconnect exceeds its earlier USD 1 billion target in timing and size, and that optical scale-up architectures, which raise fiber use from 16 to 160 fibers per GPU, accelerate in 2028.

Fiber and Glass Markers to Follow

Tracking points include Enterprise Networks growth against 84%, Solar segment results against the USD 7 million loss, and Glass Innovations sales against the 3% decline.

Further items are core operating margin relative to 22.7%, customer deposits against USD 639 million, and fourth-quarter core EPS against the USD 0.96 to USD 1.00 range.