What happened

Shares of Stratasys Ltd. (NASDAQ:SSYS) are down 10% as of 11:25 a.m. EST after the 3-D printer maker reported Q4 financial results that beat expectations for both sales and earnings.

On Wall Street, the theory heading into earnings had been that Stratasys would report pro forma profits of $0.15 per share on sales of just under $174 million. Stratasys instead reported revenues of $179.3 million and pro forma profits of $0.16 -- beating expectations on both fronts.

3-D printer

Stratasys is high-tech, but still not high profit. Image source: Getty Images.

So what

Why is Stratasys stock down instead of up? For one thing, although Stratasys's earnings may have beaten expectations, they only were profitable when evaluated pro forma. Despite adding 140 basis points to its gross margin, under GAAP accounting standards, Stratasys ended up losing money for the quarter, albeit less money than it lost in last year's Q4 -- $0.19 versus $0.30.

Similarly for the year, Stratasys's $0.75 per-share loss in 2017 was less than the $1.48 it reported losing in 2016 -- but still a loss. Also, the company's $668.4 million in sales for the full fiscal year were down about 1% year over year.

Now what

Guidance also may be weighing on Stratasys's stock this morning. Management announced that in 2018, it expects to record sales of between $670 million and $700 million -- $685 million at the midpoint -- which falls short of Wall Street's projected $688.7 million. Stratasys further warned that it will earn no GAAP profits at all (again!) and that pro forma profits will be no higher than $0.50 per share -- and could go as low as $0.30.

Wall Street  was looking for $0.61. No wonder investors are disappointed.