Is 3D Systems (DDD) Likely to Miss Earnings Yet Again?

3D Systems Corporation DDD is slated to report first-quarter 2015 results on May 6, 2015.

Last quarter, the company had posted a negative earnings surprise of 35.00%. Moreover, the company’s trailing four-quarter average miss is 20.83%

Let's see how things are shaping up for this announcement.

Factors to Consider

Recently, 3D Systems announced its preliminary first-quarter results. The company expects its revenues to be adversely impacted by the ongoing economic weakness, oil price fluctuations and currency headwinds. Consequently, 3D Systems projects its first-quarter revenues to lie in the range of $158 million to $160 million.

Also, the company expects to report a GAAP loss of 13 cents to 15 cents per share on account of these broader concerns. Non-GAAP earnings are expected to lie between 2 cents to 4 cents per share. Further, the company anticipates having cash availability of $200 million at the end of the first quarter.

Strengthening of the U.S. dollar against the Euro and Yen and aftershock of oil price changes weighed on the company’s growth in the first quarter. On account of these factors, majority of the company’s aerospace, automotive and healthcare customers reduced their printer and material & service purchases, which in turn added to its woes. Apart from these, performance troubles in metal and nylon applications restrained the capability of the company to sell additional printers during the quarter.

Despite these challenges, 3D Systems expects the software, services and consumer revenue categories to perform well in the first quarter. However, these improvements are not likely to compensate for the fall in revenues from industrial customer’s delayed purchases. Also, bookings in the first quarter are impressive and will likely act as a strength.

Earnings Whispers?

Our proven model does not conclusively show that 3D Systems will beat earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 2 cents. This leads to an earnings ESP of 0.00% for 3D Systems.

Zacks Rank: 3D Systems has a Zacks Rank #4 (Sell). Note that we caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that investors may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Tyson Foods, Inc. TSN, Earnings ESP of +1.37% and Zacks Rank #3.

The Allstate Corp. ALL has an Earnings ESP of 5.04% and a Zacks Rank #3.

Infinity Property and Casualty Corp. IPCC has an Earnings ESP of +3.00% and a Zacks Rank #3.

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