3D Systems Q2 Profit Down - Update

(RTTNews) - 3D Systems Corp. (DDD) Thursday said its second-quarter profit plunged, despite a 25 percent growth in revenues, as gross margins dropped sharply hurt by new product launches and higher productions costs. Both earnings and revenues for the quarter fell short of Wall Street estimates.

Moving ahead, the 3D printer maker lifted its revenue outlook for the full year while maintaining its earnings estimates. Shares of 3D Systems are currently down 8 percent on the New York Stock Exchange.

Rock Hills, South Carolina-based 3D Sytems' second-quarter profit plunged to $2.2 million or $0.02 per share from $9.3 million or $0.10 per share last year.

Excluding unusual gains and losses, earnings for the quarter were $0.16 per share, down from $0.20 per share last year. On average, 20 analysts polled by Thomson Reuters expected earnings of $0.18 per share for the quarter. Analysts' estimates typically exclude one-time items.

The bottom line was negatively impacted by the significant drop in gross margins, hurt largely by new product launches as well as the absorption of legacy products obsolescence and increase in manufacturing costs. Gross margins, or percentage of revenues left after deducting productions costs, dropped 4 percentage points to 47.8 percent.

Total operating costs increased to $68.0 million from $45.8 million last year.

"While transitional forces temporarily pressured our gross profit margin, a detailed examination of the specific drivers, confirms that the fundamentals of our business are intact and our gross profit margins are poised to rebound and resume their expansion trajectory," CEO Avi Reichental said.

Meanwhile, revenues for the second quarter jumped 25 percent to $151.5 million from $120.8 million a year ago. Eighteen analysts had a consensus revenue estimate of $162.28 million for the quarter. The company attributed the higher revenues to strong demand for its design and manufacturing printers, materials and service.

Looking forward to the full year 2014, the company continues to see earnings of $0.44 to $0.56 per share and adjusted earnings of $0.73 to $0.85 per share. Analysts currently forecast earnings of $0.81 per share for 2014.

3D Systems, however, lifted its revenue forecast to a range of $700 million to $740 million, from its prior outlook of $680 million to $720 million. Analysts currently expect revenues of $713.82 million for 2014.

DDD is currently trading at $51.33, down $4.74 or 8.45%, on a volume of 8.6 million shares, above the three-month average volume.