We have issued an updated research report on 3D Systems Corporation DDD on Nov 26, 2015. Over the past few quarters, 3D Systems has been experiencing unfavorable broader market conditions that have badly hit its financial performance.
Continuing with that, the company came up with dismal earnings yet again in the third quarter. Particularly, revenues from 3D printing products and services were significantly undermined due to continued challenging market conditions that adversely impacted customers' capital investment cycles and reduced demand across all geographies. Also, total printer sales decreased 26%, design & manufacturing revenues dipped 9% and consumer revenues tumbled 14%, all on a year-over-year basis.
Unimpressively, 3D Systems had also withdrawn its guidance in the first quarter of 2015 due to strong volatility in the macroeconomic environment, which severely upset investors. Macroeconomic factors such as economic slowdown, inflation, currency fluctuations, commodity prices and credit availability negatively impacted the company’s performance. If these problems persist, 3D Systems’ earnings will be curbed going forward. Also, strong competition from other established players like Stratasys Ltd. SSYS, Materialise NV MTLS and Voxeljet AG VJET remains an overhang.
Echoing similar sentiments, over the last 30 days, the Zacks Consensus Estimate for 2015 declined to loss per share of 8 cents from earnings per share of 3 cents. Also, for 2016, the Zacks Consensus Estimate for earnings per share tumbled to 10 cents from 31 cents. Consequently, the company currently carries a Zacks Rank #5 (Strong sell).
Nevertheless, 3D Systems is currently focusing on three strategic initiatives, namely, improvement of existing 3D printers, strengthening partnerships and enhancing productivity to stoke further growth. Further, 3D technology has the potential to revolutionize manufacturing and improve the commercial space. Consequently, the company has been expanding its operation processes to meet increasing demand across diverse sectors.Going forward, the company expects its portfolio of innovative products to drive more than 30% organic growth over the next couple of years, thereby enhancing its margins and earnings. We believe these efforts will significantly support 3D Systems’ growth, going forward.
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