m3This has been a terrible couple of weeks if you are an investor in any of the major 3D printing stocks. Last week, Rock Hill, South Carolina-based 3D Systems issued a preliminary earnings report, warning the market that results will come in under expectations, with the main culprit being a stronger US dollar. Following the warning by 3D Systems, came numerous downgrades by analysts and the stock plunged over $4 in the week to follow.

Here we are, several days after 3D Systems depressed the entire 3D printing sector, and the world’s second largest 3D printer manufacturer (by market cap), Stratasys (NASDAQ: SSYS) has just followed in 3D Systems’ footsteps.

Following the market’s close this afternoon, the company released preliminary first quarter, 2015 results, and they were not what analysts had been expecting. They now are estimating revenue for the first quarter to come in between $171 and $173 million when they report on May 8th, while Wall Street was expecting around $198.8 million. Additionally, Stratasys also estimates that non-GAAP earnings per diluted share will come it at between $0.02 and $0.04, falling well short of the $0.29 per diluted share that analysts had predicted.

Stratasys CEO, David Reis

Stratasys CEO, David Reis

“We are disappointed with our first quarter results,” said David Reis, Chief Executive Officer of Stratasys. “Our industry still remains in the early phases of adoption, and our belief in the long-term opportunity remains unchanged. Despite these first quarter challenges, we remain focused on our current strategies to drive sales growth and adoption, and are committed to our multi-year investment plan. As we look to the future, the 3D printing market presents an attractive opportunity that is ripe for expansion over the next several years. We are observing an attractive pipeline of future opportunities, as lead generation is increasing. As we look forward, we continue to see additive manufacturing being used to transform manufacturing and design processes across a widening range of sectors.”

Stratasys explained that revenue would have been approximately $8.7 million higher had it not been for the strength of the US dollar. The recent rise in the dollar has caused many non-US customers to cut back on spending as their own currency has less purchasing power. Currency fluctuations were not the only headwind that the company faced this quarter, as they also believe that capital spending, particularly in North America, declined, and a slower than expected channel ramp up in Asia contributed to a lackluster quarter.

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An additional cause for the rather disappointing quarter, according to the company, is the introduction of eight new products over the last half of 2014, which unexpectedly decreased adoption rates of their flagship higher end Connex 3D printers. This is not exactly what one would expect from the launch of multiple new machines at varying price points, but it’s possible that the company simply got overwhelmed.

To make matters even worse for shareholders, Stratsys has substantially revised their full-year 2015 guidance. They now expect revenue for the year, to come in at $800 to $860 million, with non-m1GAAP net income coming in at $63 to $90 million, or $1.20 to $1.70 per diluted share. This compares to the much higher expectations that analysts had for the year, of a $2.10 EPS and revenue of $943.1 million.

As for the company’s MakerBot subsidiary, things do not get much better, as Q1 revenue has declined 18% over last year’s first quarter which may have been the cause for mass layoffs earlier this month.

Overall this certainly is not great news for Stratasys or their shareholders, but the market is only in its infancy, and should continue to see rapid growth. Will Stratasys be able to straighten things out and take advantage of this growth? Let’s hear your thoughts in the Stratasys forum thread on 3DPB.com.

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