Shares of 3D Systems Corporation (NYSE: DDD) dropped as much as 29.7% on Wednesday after reporting third-quarter earnings. Sales fell and net loss grew, which is never good for a company, and management even withdrew its guidance for the year. At 1:50 p.m. EDT, shares were still down 24.1% on the day and showed no signs of picking up.
Continue Reading Below
Revenue fell 2.2%, to $152.9 million in the quarter, and net loss expanded from $21.4 million to $37.7 million, or $0.34 per share. Adjusted for one-time items, the loss was $0.20, but even that was a shock because analysts were expecting $0.12 in earnings per share on $162.9 million in revenue.
Writedowns of $12.9 million hurt earnings, but the bigger story is that demand for printers was weak, and on-demand 3D printing is seeing pricing pressure as 3D Systems tries to transition its business to a more sustainable business model of ongoing service sales. Customers, however, aren't displaying the kind of demand management had hoped.
Conditions are so uncertain that management is pulling its full-year guidance as it reviews its entire business. The go-to market team has already been turned over, and 3D Systems is reviewing what customers want to get from the company long term.
The potential for 3D printing still is incredibly long term, but getting customers to increase adoption has been much harder than most investors had hoped. Look for 3D Systems to try to transform itself into a more focused company in coming quarters, which could lead to more ups and downs for the stock as investors gauge what the future looks like in this continuously evolving industry.
10 stocks we like better than 3D SystemsWhen investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the 10 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.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017