What happened
Nearly a week after 3D printer company Stratasys (SSYS 3.28%) reported a big loss for its fiscal second quarter of 2022 -- and lost 4% of its market cap in consequence -- Stratasys archrival 3D Systems (DDD 6.96%) reported a sizable loss of its own.
As of 11 a.m., 3D Systems stock is down 14%.
NYSE: DDD
Key Data Points
So what
Heading into its Q2, analysts had forecast 3D Systems would just break even on sales of $149.1 million. As it turned out, the company missed that sales target, with quarterly revenue coming in 14% lower than a year ago at just $140 million. 3D Systems also failed to break even from a profits perspective, reporting a loss of $0.07 per share instead.
And that's the good news. The bad news is that 3D Systems' $0.07-per-share loss was a non-GAAP (adjusted) number, and when calculated according to generally accepted accounting principles (GAAP), 3D Systems lost even more money in Q2 -- $0.26 per share, which was more than three times the loss the company recorded in Q2 2021.
Now what
Granted, this news wasn't quite as bad as it seems. 3D Systems has been slimming down and cutting noncore businesses, after all, and if you exclude the revenue lost from divestitures, the company's sales actually did grow a bit -- 8% -- in Q2.
Still, the loss was very real. In addition to eschewing profit from the divested businesses, 3D Systems noted that its results were hurt by well-publicized supply chain disruptions, raw materials inflation, and also a strong U.S. dollar that depressed the value of foreign-earned profits when translated back into dollars.
Management says it's "already taken certain cost and efficiency-related actions and will take additional measures as we move through 2022, with the goal of mitigating the impact of reduced near-term demand on our financial results" -- but that didn't help 3D Systems much in Q2. And going forward, the company is warning investors that its sales will be about $50 million lower this year than previously predicted -- somewhere between $530 million and $570 million. That probably means 3D Systems will miss earnings expectations this year as well.
Given that analysts were already expecting 3D Systems to report a $0.54-per-share loss for the year (and that this number will now be even worse), I'm afraid all the investors selling 3D Systems stock today are probably making the right call.
