What happened
Shares of 3D Systems (NYSE: DDD) were down by 10.2% as of 10:40 a.m. ET Tuesday after the 3D printer manufacturer reported weaker-than-expected sales and earnings after the market closed Monday.
Heading into the first-quarter report, analysts had forecast that 3D Systems would lose $0.07 per share on sales of $128 million. As it turned out, the company's losses were $0.09 per share on sales of only $121.2 million.
So what
Even worse, that $0.09 per share loss was an adjusted non-GAAP loss. When calculated according to generally accepted accounting principles (GAAP), 3D Systems actually lost $0.23 per share, which was $0.02 a share worse than its result in the prior-year quarter. Revenues declined 9% year over year, with sales strongest in the company's medical and industrial markets, and weakest in dental orthodontics, where it seems lower consumer discretionary spending as well as customer inventory reduction efforts depressed results.
Despite all that, CEO Jeffrey Graves called the quarter "a solid start in 2023," and reiterated that his company is on track to generate sales of between $545 million and $565 million for the year, along with positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and at least breakeven free cash flow.
Now what
Graves sees the greatest potential for revenue growth in the industrial and medical segments. In the industrial space, increased use of additive manufacturing (i.e., 3D printing) in multiple areas, including commercial rocketry and aerospace propulsion, drove the company's sales 9% higher in the quarter. And in the medical industry, where products for patients are being 3D printed at the "point of care" -- i.e., right at the doctor's office -- sales were up 20%.
Nevertheless, it's worth highlighting that 3D did not guide for actual GAAP profits this year, which tallies with analysts' projections. (On average, those covering the stock think 3D will lose $0.17 per share this year). Also, the midpoint of 3D's guidance range for 2023 revenue falls just short of analysts' consensus projection of $557 million.
Given the weak guidance and the earnings miss, it's understandable that investors would be selling off 3D Systems stock Tuesday.
10 stocks we like better than 3d Systems
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and 3d Systems wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of May 8, 2023
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends 3d Systems. The Motley Fool has a disclosure policy.
