What's happening: Shares of ExOne (NASDAQ:XONE) were down nearly 12% today following the release of its second-quarter earnings after the market closed yesterday. The results fell below Wall Street expectations.
Why it's happening: In the second quarter, ExOne's revenue decreased by 24% year over year to $8.5 million, translating to a $0.48 loss per share. Wall Street was anticipating ExOne would generate $11.1 million in sales and lose $0.26 per share.
ExOne also lowered its full-year gross margin target from 36%-40% to 30%-34%, citing higher-than-expected costs and inefficiencies getting its newer production service centers and management system up and running. However, the company maintained its full-year outlook of generating between $58 million and $66 million in sales this year.
ExOne's 3D printer sales fell by 60% year over year to 2.4% million, partly because the company only recognized revenue from seven of the 12 3D printers it shipped during the quarter. It came to light last quarter that there could be a several quarters of delay between when ExOne ships a 3D printer and books the sale as top-line revenue. ExOne's accounting rules are such that it only recognizes revenue after a 3D printer is accepted by a customer, meaning the printer has been installed, made operational, and the customer has been adequately trained.
On the 3D printing services front, ExOne's non-machine revenue increased by 16% year over year and 7% sequentially to a record $6.1 million, suggesting that its binder jetting technology continues to gain acceptance across the industry.
ExOne ended the second quarter with $24.8 million in cash on its balance sheet and $2.3 million in debt.
Steve Heller owns shares of ExOne. The Motley Fool recommends ExOne. 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.