While the market for 3D printers has been experiencing staggering growth over the last couple of years, many of the larger 3D printer manufacturers can’t seem to catch a break. This especially seems to be true for Rock Hill, South Carolina-based 3D Systems (NYSE:DDD).
Earlier this week, we saw Organovo release their results a bit early, which combined with news of a Merck partnership, caused a rise in their shares. The release of preliminary earnings reports seem to be a trend within the 3D printing space, as 3D Systems today released their preliminary first quarter 2015 results. Unlike Organovo’s report, however, this one certainly was not good.
The company said that they expect to report first quarter revenue between $158 to $160 million. This falls well short of the number that analysts had been expecting of $183.5 million. Additionally, 3D Systems expects to report a non-GAAP earnings per share of between $0.02 and $0.04, as opposed to the the $0.17 per share that analysts had been expecting.
“We were surprised and disappointed by the abrupt interruption in customer demand late in the quarter from several economic factors that we believe caused our industrial customers to defer their planned investments,” said Avi Reichental, President and Chief Executive Officer, 3DS. “We believe the combination of our expanding international business and growing concentration of manufacturing customers made us more vulnerable to the steep currencies decline relative to the U.S. Dollar and the aftermath of lower oil prices that curbed aerospace and automotive expenditures.”
There is little doubt that the rise in the US dollar against almost every major currency in the world, may have forced companies overseas to either purchase machines outside the US, or scale back their purchases while waiting and hoping for their own currencies to recover. Based on the report, the strength of the US dollar reduced revenue for the quarter by $12 million when compared to 2014 quarter one currency rates.
“While the current economic climate disrupted our planned cadence for 2015, we believe that the fundamentals of our business and the strength of our portfolio remained intact. We are encouraged by the overall strengthening of our order patterns thus far during the second quarter and are accelerating our planned integration, productivity and efficiency measures without impairing future growth,” concluded Reichental.
While this obviously has hurt the company in the short run, Reichental beleives that it may equate to decent numbers in the current (2nd) quarter.
“Several weeks into the second quarter, bookings are ahead of the same period in the first quarter,” continued Reichental. “Specifically, OEMs that paused to assess their own exposure to foreign currency and macroeconomic impacts are beginning to resume their capital investments and are making the purchases they deferred during the first quarter.”
3D systems has been spending significantly on acquisitions, particularly in the medical space, helping the company expand to numerous new verticals, trying to build a fraemwork for long term success. There is little doubt that expectations may have gotten ahead of themselves, but if the company can integrate their recent acquisitions in a streamlined manner, they will set themselves up to capitalize on the rapidly growing 3D printer market.
Shares of 3D Systems are down 8% in early trading. Are you a shareholder of 3D Systems? What are your thoughts on this preliminary report? Discuss in the 3D Systems Stock forum thread on 3DPB.com