What happened
Shares of rapid manufacturer Proto Labs Inc. (PRLB 1.13%) jumped as much as 16.5% on Thursday after the company reported earnings. As of 11 a.m. EST shares had maintained a gain of 12%, and volume was already triple its daily average.
So what
Revenue fell 2% in the fourth quarter to $72.4 million as research-and-development spending in many industries declined. But revenue from 3D printing was up 8% to $9.8 million as the company integrated its acquisition of Alphaform, and more customers moved toward 3D printing from other molding methods.
Now what
The prototyping business can be choppy, but Proto Labs is adding capabilities that should allow it to maintain a strong market position in the future. Insert molding was added to injection molding last year and 3D printing products were expanded, which will help attract more small and medium-size runs from product developers.
The decline in top- and bottom-line results last quarter doesn't look great, but keep in mind that revenue rose 12.9% overall in 2016. As the market for rapid prototyping and small production runs matures, Proto Labs is in a strong position, and long-term growth should pick up steam.