As third quarter 2015 earnings were released, both the teams at Stratasys and 3D Systems were surely harkening back to more stellar times. The only teeny tiny tidbit of good news, really, was that Stratasys (SSYS) managed to come out ahead of the analyst consensus estimate by $0.02, reporting $0.01 earnings per share for the quarter instead of the projected consensus of $-0.01 EPS.
There’s been plenty going on to send both revenues and public perception plummeting in continuation from previous quarters, and while last quarter wasn’t particularly bad, it was definitely an abysmal report. Battling consistently poor earnings and product issues from MakerBot as well as headlines regarding firings, ‘painful but necessary’ layoffs, and much restructuring there, the company warned of a dismal report with the main finger pointing at the consumer for refusing to open their wallets.
With revenues of $167.60 million for the quarter, compared to expectations of $168.88 million, Stratasys came in at the middle in comparison to their warnings last month. Revenue was down -17.7% compared to the same quarter last year when they posted $0.58 EPS.
3D Systems (DDD) reports, on the other hand, came as more of a shock to the system. Missing estimates, they posted earnings of 1 cent per share and revenue of $151.6 million, with a 9% year-over-year decline. Analysts, in turn, had projected a significantly higher 8 cents per share, with revenue of $184.6 million.
“We are disappointed with our overall results and the lower revenue from our 3D printing products and services, which we believe were negatively impacted by continued challenging market conditions that extended customers’ capital investment cycles and reduced demand across all geographies,” 3D Systems Interim President, CEO, and Chief Legal Officer Andrew Johnson said in a statement. “However, we are pleased that our 3D healthcare simulators and services and 3D software contributed favorably to our results.”
While again the onus was placed on the consumer’s current and limited spending preferences and capabilities, 3D Systems has certainly been in the limelight for concerns other than their spectacular hardware lately with the departure of figurehead and CEO Avi Reichental, as well as a relentless and churning rumor mill offering up some dark days ahead with potential closures and layoffs.
As we’ve pointed out recently, 3DS was already weighed down under financial issues and trying to hold onto their market share. Now, they are presented with–and present the world with–a gross margin that has fallen 90 basis points year over year to 46.9%, with product sales plunging from $111.9 million last year to $87.7 million this year. Services revenue did increase from $55 million to $63.8 million, and 3DS was able to expand into healthcare as expressed by Johnson, moving the company into surgical planning modules and training for cardiologists.
As many smaller companies thrive in the 3D printing industry and begin their own financial and public ascents, many are left to speculate on what is to happen in the future for some of these 3D printing related companies that have risen to such large proportions in a fairly short amount of time. If the fault lies mainly on the consumer, then logically we have the economy to blame, and plenty of politicians to point the finger at instead. All in all, here’s hoping for more stabilization in the last quarter of the year all around, and into 2016.
Do you own either of these stocks? Let us know your thoughts on today’s earnings in the SSYS / DDD Earnings forum thread on 3DPB.com.