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Third-quarter earnings reported by 3D Systems (NYSE: DDD) and Stratasys (NASDAQ: SSYS) before the market open Wednesday showed continued weakness in the 3D printer market, which has been the case for more than a year.
Both stocks rose, however.
Stratasys and 3D Systems shares soared from early 2012 to early 2014, as observers touted 3D printing as one of the next big things. The stocks began to tumble in early 2014 as the companies started lowering their growth estimates. Short-seller Citron Research slammed 3D printer stocks in several research reports, starting in late 2013. Citron often takes short positions, betting that the stocks will decline.
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About 33.8 million shares of 3D Systems were listed as being sold short, or about 32% of its total float, as of Oct. 15, according to Nasdaq. Stratasys has 12.8 million shares sold short, or 26% of its float.
Stratasys, which reported preliminary Q3 earnings well below Wall Street expectation on Oct. 22, reported revenue early Wednesday of $167.58 million, down 18% from Q3 2014, the company's first year-over-year revenue decline in more than 18 quarters.
It reported earnings per share minus items of 1 cent, vs. a profit of 58 cents in Q3 2014. It marked the fourth quarter in a row of EPS declines.
Stratasys share, however, were up almost 5% in afternoon trading on the stock market today, above 28.5, though still down 66% for the year.
3D Systems stock was up 9.3%, well above 11, Wednesday afternoon, but also down about 66% for 2015.
Expects Big Q4 Sales Decline
For Q4, Stratasys expects revenue in the range of $160 million to $175 million, below the consensus estimate of $188.36 million, as polled by Thomson Reuters, and down 23% at the midpoint. It expects to lose 6 cents to 17 cents per share.
"We believe the current environment is primarily a result of weak investment in capital equipment, which has combined with the negative impact of excess capacity that we believe was created during a period of extraordinary growth for Stratasys, and the overall industry, during 2013 and 2014," Stratasys CEO David Reis said in the company's earnings release.
3D Systems reported revenue of $151.6 million, down 9% and its first year-over-year decline in more than 18 quarters. Analysts expected $180.7 million. It reported a 1-cent profit, missing the consensus of 7 cents. It had an 18-cent per-share profit in the year-earlier quarter. 3D Systems did not provide Q4 guidance.
3D Systems last week announced the resignation of CEO Avi Reichental, who held the position for 12 years. He was succeeded on an interim basis by Andrew Johnson, the company's chief legal officer.
In the company's earnings release, Johnson said the lower revenue was due to "continued challenging market conditions that extended customers' capital investment cycles and reduced demand across all geographies."
He added: "As we navigate challenging market conditions, we are taking decisive steps to reduce our cost structure and better prioritize our resources around near-term opportunities while continuing investments in quality initiatives, partner-centric programs and new products." |
