Stratasys Beats on Lower Revenues

Stratasys Inc. (SSYS - Analyst Report) reported third-quarter earnings of 9 cents per share, exceeding the Zacks Consensus Estimate of 6 cents per share.
 
Revenues
 
The company reported third-quarter revenues of $24.3 million, down 20.6% from $30.6 million reported in the year-ago quarter. The decline in sales can be attributed to a substantial reduction in product sales compared to the year-ago quarter. Segment wise, Product sales generated $18.0 million in revenue, down 24.7% from $23.9 million reported in the year-ago quarter. Service revenue for the quarter was $6.3 million, down 4.5% from $6.6 million reported in the year-ago quarter.
 
Operating results
 
Gross profit was $11.9 million (or 48.9% of revenue), compared to $15.8 million (or 51.7% of revenue) in the year-ago quarter. The decline in gross margin was the result of revenue decline at a higher rate than the cost of goods sold. Operating income for the quarter was $2.4 million (or 9.9% of revenue), compared to $5.3 million (or 17.3% of revenue) in the year-ago quarter. 

Although operating expenses declined 9.9%, it failed to make up the decline in revenue. 

The company reported net income of $1.6 million in the third quarter, or 8 cents per share, compared to net income of $3.7 million, or 18 cents per share in the same period last year. Excluding certain discrete items and stock-based compensation expense, non-GAAP net income was $1.8 million, or 9 cents per share in the third quarter, compared to $4 million, or 19 cents per share, in the same period last year.

Balance Sheet

The company generated $8.7 million cash flow from operations at the end of the third quarter as a result of efficient management of working capital. The company exited the quarter with cash, cash equivalent and short term investments of $47.2 million. The company does not have any long term debt.

Guidance

Stratasys did not provide any revenue guidance for the fourth quarter, but believes that although the near-term economic outlook remains challenging, there are positive signs within its sales channel.

We are cautiously optimistic about its performance in the fourth quarter.

Read the full analyst report on SSYS