Why 3D Systems Corporation Stock Popped as Much as 13% Today

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What happened

Shares of 3D-printing giant 3D Systems Corporation (NYSE: DDD) jumped as much as 12.8% in trading Thursday after the company reported fourth-quarter 2017 results. As of 2:47 p.m. EDT, the stock was up 7.7%.

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So what

Revenue grew 6.8% in the quarter to $177.3 million, but net loss was $10.1 million, or $0.08 per share. On a non-GAAP basis, earnings were $0.05 per share versus $0.15 a year ago. Analysts were only expecting earnings of $0.01 per share, so that's where the big surprise was for investors.

Gross margin fell from 50% to 48.2% in the quarter, partially due to lower-margin on-demand manufacturing sales, as well as operating expenses that were up 15.7% to $91.2 million. Those factors that negatively impacted profitability and offset sales growth in the quarter.

Now what

Investors are cheering 3D Systems' return to growth and the fact that it's squeezing out even a small profit on a non-GAAP basis. The company has seen revenue shrink since peaking in 2015, so the turnaround late in 2017 is a positive sign. Management didn't give guidance for 2018, but investors should look for revenue growth to continue and potentially improving operating margins. If that happens, the stock could be in for a big bounce from its recent lows.

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.