What happened
Investors in 3D industrial printer maker 3D Systems (DDD 2.04%) went wobbly on Tuesday. At first, things looked grand for the additive manufacturing stock, as shares soared more than 15% in response to a big earnings beat early in the day. Things soon took a turn for the worse, however, as 3D stock steadily gave back all of those gains -- and more.
As of 10:55 a.m. ET, the stock is now actually down 2.1% for the day!
Image source: Getty Images.
So what
What could have caused such an abrupt turnaround? Well, let's take a look at the numbers.
We'll begin with the good news: In the fourth quarter of 2021, 3D Systems earned $0.09 per share pro forma -- more than twice analysts' forecast of $0.04. Sales outperformed expectations as well, falling year over year, true -- but falling only 12.6% to $150.9 million, which was better than the decline to $144.2 million that Wall Street had predicted. Moreover, as 3D explained, declines in revenue in Q4 were "driven solely by divestitures of non-core assets. ... Adjusted for divestitures [sales actually] increased 13.1%" year over year.
Still, 3D had to go to generally accepted accounting principles (GAAP) with the business it had, not the adjusted numbers it wished to have: And when calculated according to GAAP, sales did decline, and the company actually lost $0.05 per share.
Now what
All that being said, 3D did outperform expectations, which explains why the stock went up at first. So why did it end up going back down? The answer is guidance.
3D issued a new outlook for 2022 last night, warning that full-year 2022 revenue will range from $570 million to $630 million. And based on the company's prediction of 40% to 44% "non-GAAP gross margins" and "non-GAAP operating expenses [of] between $225 million and $250 million," this suggests there's a chance 3D might lose money this year.
Granted, at the midpoint of all those expectations, 3D still might be expected to earn perhaps $14.5 million this year, or about $0.11 per share -- so there's hope for at least a pro forma profit. Relative to analyst pro forma forecasts of $0.21 per share, though, that appears to imply that 3D Systems will miss earnings in 2022.
