Corning Inc.'s (GLW) third-quarter profit jumped 22% amid higher sales and margins, but the company issued a muted fourth-quarter outlook for glass displays used in liquid-crystal-display television sets.

Corning projected world-wide glass market demand to be flat to down slightly in the fourth quarter and glass pricing to decline in the mid-single digits--a larger slide than in previous quarters due to ample supply. Chief Financial Officer Jim Flaws said fourth-quarter sales and earnings will be lower than in the third quarter.

The maker of glass used in LCD screens on TVs, computer monitors and other electronics has enjoyed soaring profit as demand has risen this year. But demand slowed in the third quarter, with the company in September cutting its outlook for third-quarter glass volume as panel makers pulled back production to deal with excess inventory.

Flaws said Monday that the company saw a "modest" increase in panel utilization rates in October, which modestly boosted glass demand. He said the company expects utilization rates to remain modestly higher for the rest of the fourth quarter compared to the low point in September, but it is possible rates could be lower on average for the fourth quarter than for the third.

Corning shares, down 4.3% this year, recently rose 1.1% to $18.48.

Volume declines were largely expected based on recent commentary out of the panel market, Brigantine Advisors analyst Darice Liu said. She added that investors had been waiting for the company to report price cuts.

"For Corning to capitulate on fourth-quarter pricing guidance, we think that's probably the last shoe to drop for the company," Liu said.

Corning posted a profit of $785 million, or 50 cents a share, up from $643 million, or 41 cents a share, a year earlier. Excluding items such as an asbestos liability-related charge and debt buybacks, earnings rose to 51 cents from 42 cents as revenue increased 8.3% to $1.6 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of 52 cents on $1.61 billion in revenue.

Gross margin widened to 45.2% from 40.5% amid lower production costs.

Corning's display revenue, by far the company's largest business, fell 5% from a year earlier in the third quarter as volume fell by that amount.

Flaws said on a conference call with analysts and investors that LCD TV retail sales remained strong world-wide, except in the U.S. He expects that strong demand to continue in the fourth quarter, driven by heavy holiday promotions on LCD televisions and that demand in the U.S. should be stronger.

Telecommunications rose 3.1% while the specialty materials segment had a 77% surge amid strong sales of Gorilla Glass and advanced optics products.

Corning has positioned its scratch-resistant Gorilla Glass, used in smartphone and tablet computer screens, as the next growth driver.

Flaws said on the company's conference call that 23 major brands have chosen Gorilla Glass as a cover material for handheld devices and laptops, and more than 200 million units in use today have Gorilla Glass. He said the company has more than 240 design wins to date, with 140 models currently in the market and 90 more to be release in the next six months. Flaws added that interest continues outside the consumer-electronics industry, including from auto, appliance and architectural industries.

-By Shara Tibken and Matt Jarzemsky, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com
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