3D Systems Earnings Show Ongoing Struggle In 3D Printer Market
3D Systems ( DDD ) missed with its Q1 revenue posted early Thursday, its third straight quarter of year-over-year declines in sales, as the 3D printer market resets expectations. Before the open, 3D Systems reported Q1 revenue of $152.5 million, down 5% year over year and missing the consensus of $156.3 million. Excluding the contribution of consumer products and services that the company no longer sells, revenue fell 2%. The company posted flat earnings per share minus items of 5 cents. 3D Systems stock was down nearly 6%, near 14, in afternoon trading in the stock market today , and it touched a seven-week low. Vyomesh Joshi, named CEO last month, sees big market opportunities ahead. “I’ve spent the past month listening to and learning from customers, partners and employees,” commented Joshi said. “I will be focusing on improving quality, reliability and supply chain. The next phase for us is to develop a strategy to drive profitable growth with operational excellence and an appropriate cost structure.” Joshi had been executive vice president of the imaging and printing business of HP Inc. ( HPQ ), formerly part of Hewlett-Packard before its split. HP plans to enter the 3D printer market this year. In the company’s earnings conference call, 3D Systems CFO David Styka said demand for professional 3D printers remained soft last quarter. Revenue from professional printers excluding desktop decreased 23%, on a 50% decline in unit sales. “The decrease in units was partially due to the availability gaps for new MultiJet Printers rolled out during the first quarter,” he said. CEO Joshi, on the call, repeated several times he was in a learning mode, but optimistic ahead. “The other important part that I am learning and that’s the vertical approach where we want to go after health care, aerospace, automobile, and also higher education,” he said, “because, if you think about the universities, we need to get a lot of people trained in understanding the 3D market.” 3D Systems did not give earnings guidance. It and and Stratasys ( SSYS ) are the two largest providers of 3D printers. Stratasys is set to report earnings before the market open Monday. Its shares were down nearly 3% Thursday afternoon. 3D printer makers ExOne ( XONE ) and Voxeljet ( VJET ) are set to report earnings on May 11 and May 13, respectively, both before the market open. Needham analyst James Ricchiuti last week lowered his rating on 3D Systems to hold from buy, “as shares might be pricing in too much,” he wrote. “Notwithstanding solid sequential improvement in Q4 from the publicly traded 3D printing companies, we believe business remains challenging, compounded by the normal seasonal weakness experienced in the March quarter,” Ricchiuti wrote.