3D Systems Corporation (DDD - Free Report) is slated to report second-quarter 2016 results before the opening bell on Aug 3.
Last quarter, the company posted a massive negative earnings surprise of 400.0%. Also, 3D Systems has had an unimpressive earnings history wherein it missed estimates thrice in the last four quarters, leading to an average negative surprise of 158.3%.
Let's see how things are shaping up for this announcement.
Factors to Consider
3D Systems’ broad portfolio of healthcare offerings is likely to turn out to be the strongest profit churners for the second quarter of 2016. Leveraging on its core competence in expanding healthcare solutions is one of the company’s five-pronged core growth strategies. During first-quarter 2016, revenue from healthcare and related applications increased 12% year over year, driven by the company’s extensive offerings, as well as expansion by clients who print medical and dental devices.
Particularly, precision healthcare offerings like printers and materials, surgical simulation and planning and printing of devices and tools contributed to growth. This apart, the company’s other four growth channels, namely, expansion of quickparts services, accelerating 3D printer penetration through channel expansion, launch of integrated 3D authoring solutions platform and strengthening of partnerships are expected to prove conducive to growth in the soon to be reported quarter.
During the second quarter of 2016, 3D Systems released the GibbsCAM 2016 software for production machining and comprehensive 3D scan-to-solidworks software called Geomagic. In addition, the company’s operational restructuring initiatives like improving of the sales network as well as undertaking of lean manufacturing initiatives in supply-chain operations are expected to be conducive to results. Also, 3D Systems upped the ante by making some key hires for the quarter and expects them to bolster the company’s internal strength in the quarter to be reported and beyond.
McMullen, who was serving as the Executive Vice President and CFO at Eastman Kodak Co, has been appointed in the position of Chief Financial Officer while Vyomesh Joshi has been appointed as the President and CEO.. It will be interesting to watch how these veterans manage to turn things for the company which has been experiencing strong headwinds in recent times.
Over the past few quarters, the company has been witnessing particularly unfavorable broader market conditions that have hit its financial performance severely. The company has been grappling with macroeconomic headwinds such as economic slowdown, inflation, currency fluctuations, commodity prices and credit availability. In the reported quarter, revenues from 3D printing products and services were significantly undermined due to continued challenging market conditions that impacted customers' capital investment cycles and reduced demand across all geographies.
The company’s product revenues decreased 11% year over year in the reported quarter, due to lower printer sales. Also, cut-throat competition in the industry coupled with factors like escalating research & development and selling & administrative expenses are likely to mar the financials.
Earnings Whispers
Our proven model does not conclusively show that 3D Systems will beat earnings estimates in this quarter. This is because a stock needs to have both a positive positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company currently stands at 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at a break even.
Zacks Rank: 3D Systems currently carries a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the 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 have the right combination of elements to post an earnings beat this quarter:
CDK Global Inc. has an Earnings ESP of +4.26% and a Zacks Rank #1.
MKS Instruments, Inc. (MKSI - Free Report) has an Earnings ESP of +2.6% and a Zacks Rank #1.
Analog Devices, Inc. (ADI - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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3D Systems Corporation (DDD - Free Report) is slated to report second-quarter 2016 results before the opening bell on Aug 3.
Last quarter, the company posted a massive negative earnings surprise of 400.0%. Also, 3D Systems has had an unimpressive earnings history wherein it missed estimates thrice in the last four quarters, leading to an average negative surprise of 158.3%.
Let's see how things are shaping up for this announcement.
Factors to Consider
3D Systems’ broad portfolio of healthcare offerings is likely to turn out to be the strongest profit churners for the second quarter of 2016. Leveraging on its core competence in expanding healthcare solutions is one of the company’s five-pronged core growth strategies. During first-quarter 2016, revenue from healthcare and related applications increased 12% year over year, driven by the company’s extensive offerings, as well as expansion by clients who print medical and dental devices.
Particularly, precision healthcare offerings like printers and materials, surgical simulation and planning and printing of devices and tools contributed to growth. This apart, the company’s other four growth channels, namely, expansion of quickparts services, accelerating 3D printer penetration through channel expansion, launch of integrated 3D authoring solutions platform and strengthening of partnerships are expected to prove conducive to growth in the soon to be reported quarter.
During the second quarter of 2016, 3D Systems released the GibbsCAM 2016 software for production machining and comprehensive 3D scan-to-solidworks software called Geomagic. In addition, the company’s operational restructuring initiatives like improving of the sales network as well as undertaking of lean manufacturing initiatives in supply-chain operations are expected to be conducive to results. Also, 3D Systems upped the ante by making some key hires for the quarter and expects them to bolster the company’s internal strength in the quarter to be reported and beyond.
McMullen, who was serving as the Executive Vice President and CFO at Eastman Kodak Co, has been appointed in the position of Chief Financial Officer while Vyomesh Joshi has been appointed as the President and CEO.. It will be interesting to watch how these veterans manage to turn things for the company which has been experiencing strong headwinds in recent times.
Over the past few quarters, the company has been witnessing particularly unfavorable broader market conditions that have hit its financial performance severely. The company has been grappling with macroeconomic headwinds such as economic slowdown, inflation, currency fluctuations, commodity prices and credit availability. In the reported quarter, revenues from 3D printing products and services were significantly undermined due to continued challenging market conditions that impacted customers' capital investment cycles and reduced demand across all geographies.
The company’s product revenues decreased 11% year over year in the reported quarter, due to lower printer sales. Also, cut-throat competition in the industry coupled with factors like escalating research & development and selling & administrative expenses are likely to mar the financials.
Earnings Whispers
Our proven model does not conclusively show that 3D Systems will beat earnings estimates in this quarter. This is because a stock needs to have both a positive positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company currently stands at 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at a break even.
Zacks Rank: 3D Systems currently carries a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the 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 have the right combination of elements to post an earnings beat this quarter:
CDK Global Inc. has an Earnings ESP of +4.26% and a Zacks Rank #1.
MKS Instruments, Inc. (MKSI - Free Report) has an Earnings ESP of +2.6% and a Zacks Rank #1.
Analog Devices, Inc. (ADI - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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