One company -- unsurprisingly, one of our Motley Fool Rule Breakers picks -- is working to make Star Trek technology a real part of our daily lives.
Although not yet able to synthesize piping-hot beverages, the Stratasys
According to a rolling roll call of marquee customers on the company's website, Stratasys' machines are in use at electronics specialists Hewlett-Packard
Stratasys reported its first-quarter earnings last week, and the numbers sparked what is, as of this writing, an 11% rally in the stock. Sales posted a respectable 12% rise, while margins soared. The gross margin increased nearly 300 basis points to 56.7%, and despite sizeable investment in research and development, Stratasys' operating margin retained most of this increase in rising 170 basis points to 17.9%. Hence, Stratasys was able to print more profit than the revenue spike would suggest -- $0.18 per share.
The increase in margin would appear to validate Stratasys' strategy of emphasizing its own higher-end 3-D printers and halting its lower-margin resales of other people's printers. According to management, 89% of the printers it sold last quarter were "premium" Dimension 1200es and Dimension Elite models.
Strangely, the improved Q1 performance hasn't yet persuaded management to raise its guidance for the year. Revenues are still predicted to come in around $133 million, with profits in the neighborhood of $0.81 per share.
Why no boost to guidance? I'm just guessing here, but CEO Scott Crump's mention of his "longer-term strategy of growing the market by making the systems more affordable" suggests that management might not be averse to sacrificing some profitability in pursuit of higher sales volume. I don't mean that to detract from Stratasys' strong quarter, but it's something to keep in mind going forward.
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