Please ensure Javascript is enabled for purposes of website accessibility

3D Systems Corporation Soars After Slight Earnings Miss

By Steve Heller – Aug 6, 2015 at 2:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

2:41 p.m. EDT: Investors seem to be relieved that the 3D printing company's second-quarter results didn't contain any new major negative developments -- an occurrence that's become far too common recently.

What's happening: Shares of 3D Systems (DDD -5.23%) were trading up as much as 26% higher today after the company released second-quarter earnings that came in slightly below Wall Street expectations.

Why it's happening: In the second quarter, 3D Systems generated $170.5 million in revenue, an increase of 13% year over year, translating to a net loss of $0.12 per share, or a $0.03 net profit per share on a non-GAAP basis. Wall Street expected 3D Systems to generate $173.7 million in revenue and earn an adjusted $0.09 per share.

While 3D Systems missed Wall Street estimates and cited ongoing macroeconomic challenges in the release, investors seem to be relieved that the quarter wasn't plagued with any new major negative developments -- an occurrence that's become far too common in recent quarters. Investors may have also found it encouraging that 3D Systems' underlying business showed early signs of stabilization and that the worst of the macroeconomic uncertainty it faced in the previous two quarters could be behind it.

Revenue for its design and manufacturing products and services increased by 12% annually and by 11% sequentially to $161.2 million. 3D Systems' organic growth rate, which measures annual revenue growth outside of acquisitions from the last year, declined by 5% year over year, but increased by 2% after adjusting for currency fluctuations.

What's more, 3D Systems' product revenue increased by 10% year over year, while its order backlog increased by 3% sequentially, indicating that demand for future orders may have stabilized some. Management even noted that industrial healthcare and aerospace customers resumed their purchases after having paused in previous quarters.

Considering nearly one-third of 3D Systems' shares outstanding have been sold short, it's likely that today's price action was at least partially caused by a flood of bears rushing to close their positions after learning that the company's earnings weren't as bad as feared.

Steve Heller owns shares of 3D Systems. The Motley Fool recommends and owns shares of 3D Systems. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

3D Systems Corporation Stock Quote
3D Systems Corporation
$7.98 (-5.23%) $0.44

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.