What happened

Shares of 3D printer manufacturer Stratasys, Ltd. (NASDAQ:SSYS) fell as much as 12.9% during trading on Wednesday after the company reported first-quarter earnings results that fell well short of expectations. There was a slight recovery as the day went on, but shares were still down 9.1% at 3:10 p.m. EDT.

So what

First-quarter sales fell 5.7% versus a year ago, to $153.8 million, and fell well short of the $167.5 million that analysts were expecting. The company also continued to lose money, posting a $13.0 million loss, or $0.24 per share. On a non-GAAP (generally accepted accounting principles) basis, earnings were $2.7 million, or $0.05 per share, below the $0.08 Wall Street expected.

A 3D printer printing a hand

Image source: Getty Images.

Management said the disappointing performance was driven by lower-than-expected high-end system orders in North America, including to government, aerospace, and automotive customers. If adoption of high-end printers continues to be slow, it could mean that large-scale 3D printers for enterprise customers won't gain traction quickly enough to make a meaningful impact on the business in the near term; since these are big-ticket items, any delays have a material impact on the company's financials. Management tried to ease some of those fears by announcing new collaborations with Eckhart and SIA Engineering, but the slow first quarter is what investors focused on today.

Now what

The drop in revenue could have been little more than a timing issue, and big orders will end up coming through by year-end. That would be what management is trying to indicate by maintaining revenue guidance of $670 million to $700 million, and non-GAAP earnings guidance of $0.30 to $0.50 per share. Investors are more skeptical, fearing that high-end printer sales will be delayed further -- and that's why shares are down today.

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends Stratasys. The Motley Fool has a disclosure policy.