Xone
Source: ExOne.

The 3D printing industry has already shown signs of revolutionizing manufacturing worldwide, and a host of companies have entered the space hoping to make their fortune. One of those companies is ExOne (NASDAQ:XONE), which has a key competitive advantage over better-known rivals 3D Systems and Stratasys in that it has the technology to create parts made of metal, sand, glass, and other substances. Using this edge, ExOne appeals to many customers that need high-performance goods for applications in which plastic just won't cut it.

Yet as traders grew nervous about how high the share prices of ExOne and its peers had risen, they took profits on 3D printing stocks, sending them falling throughout 2014 -- especially during the latest turbulence in the stock market. Shareholders are now looking at third-quarter earnings with the hope that the worst of the share-price plunge will soon be over. Let's take an early look at what's been happening with ExOne over the past quarter and what we're likely to see in its report.

Stats on ExOne

Analyst EPS Estimate

($0.13)

Year-Ago EPS

($0.02)

Revenue Estimate

$15.3 million

Change From Year-Ago Revenue

32%

Earnings Beats in Past 4 Quarters

0

Source: Yahoo! Finance.

Will ExOne print up a better profit picture?

In recent months, investors have questioned ExOne's ability to become profitable in the near future, boosting their loss estimate for the third quarter by more than a dime per share and now expecting annual losses to continue through 2015. The stock has taken a drubbing, losing another 30% just since early August.

ExOne's second-quarter results in August didn't do much to encourage investors hoping for a quicker recovery for the stock. Net losses per share came in more than double what investors had anticipated, and while revenue grew by 21%, the $11.2 million in sales was almost $1 million less than what most followers of the company had pegged. The relatively high prices of its printers make the timing of sales volatile at best, but the company's ExCast parts-fabrication business has shown accelerating growth despite some concerns about quality control for specific high-performance applications.

Xone Booth
Source: ExOne.

Yet it's important to understand that ExOne has a longer-term growth vision in mind. As CEO Kent Rockwell said in August, "The market opportunities that we develop now should be the foundation for our success in 2015 and beyond." With a growing customer base and a greater understanding of how its binder-jetting technology fits into the broader 3D printing industry, ExOne hopes it can expand its scope and get customers in completely different industries to use its 3D printers for innovative applications of their own. ExOne also hasn't been afraid to put money toward its aggressive plans, planning this year to spend between $7 million and $8 million on research and development and $31 million to $34 million on capital projects.

One challenge, though, is convincing some of the company's most obvious potential customers to embrace its technology. Metal foundries are a natural fit for ExOne printers, which can help produce sand molds for castings for industrial metal parts and make the foundries' efforts easier. Yet with foundries nervous about losing business if their proprietary mold-making techniques were essentially farmed out, ExOne has instead bypassed those foundries as primary sales targets to go directly after their customers. By eliminating the foundry intermediary, ExOne could find customers excited about bringing parts-making operations in-house and reaping cost savings.

In many ways, though, ExOne's biggest issue is just working through growing pains. Despite its lumpy results, the company still expects to reach revenue of $55 million to $60 million for the year, which is more than most investors are looking for from it now. As total sales in the industry keep climbing, ExOne will have the potential to capture a larger share of a growing pie and to attract takeover speculation from 3D Systems, Stratasys, or other players seeking the company's metalworking expertise.

In the ExOne earnings report, focus less on the short-term sales and income figures and instead on the company's statements about its long-term direction. As long as ExOne's overall strategy remains valid, rising demand for its parts-fabrication services, as well as outright printer sales, should eventually give shares a bounce after the stock's dramatic plunge in 2014.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of 3D Systems, ExOne, and Stratasys. 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.