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3D Systems Misses on Earnings Ests

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On Feb 28, 2014, 3D Systems Inc. (DDD - Free Report) reported fourth-quarter and fiscal 2014 results. For the fourth quarter, non-GAAP earnings came in at 16 cents a share which was 27.3% below the Zacks Consensus Estimate of 22 cents.

For fiscal 2013, the company reported non-GAAP earnings of 85 cents a share which were well above the Zacks Consensus Estimate of 81 cents a share.

Quarterly Details

For the fourth quarter of 2013, the company reported revenues of $154.8 million reflecting an increase of 52.4% year over year. Revenues were almost in line with the Zacks Consensus Estimate of $155 million. The robust revenue increase was primarily driven by a 76% increase in printers and other products and organic growth of 34%.

However, for full-year 2013, revenues surged 45.2% year over year, driven by robust demand in professional and advanced manufacturing printers, increased materials growth rate and total unit sales which grew three times compared to the prior year.

For the fourth quarter, product wise revenues are — revenues in the 3D printers and other products category grew 76% to $73.9 million while print materials revenues grew 39% to $37.2 million. Further, service revenues grew 33% to $43.7 million, while healthcare and consumer solutions grew a robust 67% and 162% respectively.

For the fourth quarter, gross margin was flat year over year at 51.7% as higher sales were more than offset by unfavorable mix and extraordinarily high concentration of new product announcements. The operating margin also contracted approximately 620 basis points to 11.6% versus 17.9% in the prior year quarter. During the quarter, the company incurred a significant increase in research and development (R&D) expenditures along with a surge in sales and marketing expenses.

Cash and Balance Sheet

3D Systems ended the year with cash and cash equivalents of $306 million compared with $155 million in the prior year, while net cash flow from operating activities was $25.2 million.

The company has a long-term debt (including the portion of capitalized lease obligations) of $7.2 million.


Concurrent with the earnings release, the company provided guidance for fiscal 2014. Management expects revenues in fiscal 2014 to be in the range of $680 million to $720 million, while GAAP earnings are expected in the range of 44 cents to 56 cents and non-GAAP earnings per share are expected to be in the range of 73 cents to 85 cents a share.

3D Systems currently holds a Zacks Rank #5 (Strong Sell). However, some companies in the computer and peripheral sector that are worth considering at the moment include Logitech International (LOGI - Free Report) and Silicom Ltd , both carrying Zacks Rank #1 (Strong Buy) and Hewlett Packard (HPQ - Free Report) carrying a Zacks Rank #2 (Buy).

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