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3D Systems (DDD) Q2 Results: Is a Surprise in the Cards?
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3D Systems Corporation (DDD - Free Report) is slated to report second-quarter 2017 earnings after the closing bell on Aug 2.
3D Systems missed earnings estimates by a whopping 71.4% in the last reported quarter.
Let's see how things are shaping up for this announcement.
Factors to Consider
Over the past few years, 3D Systems’ healthcare business has proven to be its strongest profit churner. To make the most of the positive industry trends, the company has developed a spectrum of innovative solutions ranging from simulation to implants. Recently, it forayed into spinal surgery training with the launch of Simbionix SPINE Mentor, a hands-on simulated training and practice tool.
We believe the new offerings, coupled with high demand for printers and materials from medical and dental customers, will continue to raise the healthcare business top line for the soon-to-be-reported quarter. This apart, demand for production printers, materials and software is expected to act as major catalysts, supplementing growth.
In this regard, the previously launched ultra-fast, modular 3DXpert software solution for direct metal 3D printing and upgraded version of Figure 4 technology – the Stereolithography system – are likely to ramp up the second-quarter top line. In addition, the company has successfully improved its cost structure and optimized its supply chain through concerted restructuring efforts. Cost savings, accruing from these supply chain and manufacturing improvements, are expected to boost sales for the quarter under review.
Despite these positives, 3D Systems is facing strong short-term headwinds, which are likely to weigh down on its second-quarter financials. For quite some time now, waning demand for printers has added to the company’s concern. For full-year 2016, total revenue from printers declined 21%. This trend has extended to 2017. Moreover, first-quarter 2017 sales have continued to plunge. We believe these weaknesses will persist and mar second-quarter results.
Historically, currency fluctuations and commodity price vagaries have affected sales and are likely to play spoilsport for the soon-to-be-reported quarter. This apart, 3D Systems has to contend itself with strong competition, which often results in price cuts and lower profitability. The entry of HP Inc. and General Electric has shaken things up in the industry and pose as concerns for 3D Systems.
Earnings Whispers
Our proven model does not conclusively show that 3D Systems will beat estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: 3D Systems has a Zacks Rank #3. Though a Zacks Rank #1, 2 or 3 increase the predictive power of the ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter.
CACI International Inc (CACI - Free Report) has an Earnings ESP of +1.83% and a Zacks Rank #2.
Arrow Electronics, Inc. (ARW - Free Report) has an Earnings ESP of +1.13% and a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
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3D Systems (DDD) Q2 Results: Is a Surprise in the Cards?
3D Systems Corporation (DDD - Free Report) is slated to report second-quarter 2017 earnings after the closing bell on Aug 2.
3D Systems missed earnings estimates by a whopping 71.4% in the last reported quarter.
Let's see how things are shaping up for this announcement.
Factors to Consider
Over the past few years, 3D Systems’ healthcare business has proven to be its strongest profit churner. To make the most of the positive industry trends, the company has developed a spectrum of innovative solutions ranging from simulation to implants. Recently, it forayed into spinal surgery training with the launch of Simbionix SPINE Mentor, a hands-on simulated training and practice tool.
We believe the new offerings, coupled with high demand for printers and materials from medical and dental customers, will continue to raise the healthcare business top line for the soon-to-be-reported quarter. This apart, demand for production printers, materials and software is expected to act as major catalysts, supplementing growth.
In this regard, the previously launched ultra-fast, modular 3DXpert software solution for direct metal 3D printing and upgraded version of Figure 4 technology – the Stereolithography system – are likely to ramp up the second-quarter top line. In addition, the company has successfully improved its cost structure and optimized its supply chain through concerted restructuring efforts. Cost savings, accruing from these supply chain and manufacturing improvements, are expected to boost sales for the quarter under review.
Despite these positives, 3D Systems is facing strong short-term headwinds, which are likely to weigh down on its second-quarter financials. For quite some time now, waning demand for printers has added to the company’s concern. For full-year 2016, total revenue from printers declined 21%. This trend has extended to 2017. Moreover, first-quarter 2017 sales have continued to plunge. We believe these weaknesses will persist and mar second-quarter results.
Historically, currency fluctuations and commodity price vagaries have affected sales and are likely to play spoilsport for the soon-to-be-reported quarter. This apart, 3D Systems has to contend itself with strong competition, which often results in price cuts and lower profitability. The entry of HP Inc. and General Electric has shaken things up in the industry and pose as concerns for 3D Systems.
Earnings Whispers
Our proven model does not conclusively show that 3D Systems will beat estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3D Systems Corporation Price and EPS Surprise
3D Systems Corporation Price and EPS Surprise | 3D Systems Corporation Quote
Zacks Rank: 3D Systems has a Zacks Rank #3. Though a Zacks Rank #1, 2 or 3 increase the predictive power of the ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter.
KEMET Corporation (KEM - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CACI International Inc (CACI - Free Report) has an Earnings ESP of +1.83% and a Zacks Rank #2.
Arrow Electronics, Inc. (ARW - Free Report) has an Earnings ESP of +1.13% and a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>