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3D Systems Posts Strong Revenue Growth and Expectations Rise for February Auto Sales

By Daniel Miller - Feb 28, 2014 at 3:00PM

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Here are the highlights of 3D Systems' fourth quarter results and Edmunds' forecast for February automotive sales.

The Dow Jones Industrial Average (^DJI 0.09%) is trading 0.21% higher by midafternoon after U.S. fourth-quarter GDP growth was revised down to 2.4% from the initial 3.2% mark. In other news, pending home sales rose only 0.1% in January from the previous month, which was less than expected. These numbers go hand in hand with lower consumer spending which will be something for investors to watch as we head into the last month of the first quarter. With that in mind, here are some companies making headlines on the last day in February.

3D Systems (DDD 5.00%) today announced fourth-quarter and full-year 2013 results that initially sent the stock shooting up before it settled down for a .84% gain just before 3 p.m. 3D Systems posted record quarterly and annual revenue, up 52% and 45% year over year, respectively. The company's organic growth increased 34% in the fourth quarter and 29% for the full year. Though the results are impressive, it's clear revenue growth could have been even higher.

"Compared to our late quarter expectations, we are disappointed that our stronger order book didn't convert to higher revenue, but instead, resulted in a near doubling of last quarter's backlog. Despite our higher growth, certain revenue categories fell short of our expectations and the concentration of new product announcements deferred sales and suppressed expected gross profit margin for the quarter," Avi Reichental, 3D Systems' president and chief executive officer, said in a press release.

3D systems expects 2014 revenue to check in between $680 million to $720 million on 30% organic growth.

In the automotive industry, investors hope that February will help offset a weak January performance caused by less than favorable weather.

"When the weather doesn't behave, it has a negative impact on car shoppers who are looking for an easy and smooth process at the dealership, so that's why sales will be weak for a second month in a row," according to Edmunds.com senior analyst Jessica Caldwell. "But as the weather improves -- a lot like we saw this past week -- dealerships will be filled with eager shoppers. The strength of pent-up demand promises to keep sales on the right path as spring approaches."

Edmunds projects General Motors (GM 4.16%), Ford (F 3.14%), and Toyota (TM -0.71%) to lead sales by volume, although expectations are for the industry to post a meager 0.8% increase over last year's February. That said, that would also be a 18.9% improvement over the weak January results.

Sales Volume
Feb-14 Forecast
Feb-13
Jan-14
Change from Feb 2013*
Change from Jan 2014*
GM
212,232
224,314
171,486
-5.4%
23.8%
Ford
185,604
195,310
153,494
-5%
20.9%
Toyota
162,446
166,377
146,365
-2.4%
11%
Chrysler Group
155,106
139,014
127,183
11.6%
22%
Nissan
115,856
99,636
90,470
16.3%
28.1%
Honda
106,530
107,987
91,631
-1.3%
16.3%
Hyundai/Kia
95,725
93,816
81,016
2%
18.2%
VW/Audi
37,036
42,333
33,595
-12.5%
10.2%
Industry
1,201,445
1,191,904
1,010,080
0.8%
18.9%

Source: Edmunds.com.

Edmunds projects industry sales to reach 1,201,445 for the month, which would equate to a seasonally adjusted annual rate of 15.5 million. Just as important as the sales figures themselves will be how the industry is using incentives to increase foot traffic -- if sales remain weak automakers could be tempted to increase incentives to improve sales, which could lead to price wars. It will be important for investors to keep an eye on incentive figures and overall sales as we head into the last month of the quarter and into the important spring-selling months. 

Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends 3D Systems, Ford, and General Motors. The Motley Fool owns shares of 3D Systems and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,832.54 (0.09%) $29.07
Ford Motor Company Stock Quote
Ford Motor Company
F
$15.78 (3.14%) $0.48
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
TM
$156.20 (-0.71%) $-1.11
General Motors Company Stock Quote
General Motors Company
GM
$37.56 (4.16%) $1.50
3D Systems Corporation Stock Quote
3D Systems Corporation
DDD
$13.24 (5.00%) $0.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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