Coatue Management Lessens Its Position in 3D Systems
Analyzing Coatue Management's Decreased Positions in 4Q14 (Part 6 of 6)
Coatue management and 3D Systems
Coatue Management reduced its position in 3D Systems (DDD) in 4Q14. Now, this position is valued at $35 million and accounts for 0.33% of the fund’s fourth quarter portfolio.
Merger and acquisitions
In February 2015, 3D completed its acquisition of Cimatron (CIMT) in a transaction worth $97 million. Earlier this month, 3D Systems also acquired a leading Chinese 3D printing sales and service provider, Easyway Design and Manufacture Company, in China (FXI). The joint company is now called 3D Systems China.
The company’s press release said, “Easyway brings to 3DS extensive and experienced greater China sales and service coverage, substantial service bureau production capabilities and long-term, key relationships with leading Chinese automotive, medical and consumer goods companies, including VW, Nissan, Philips, Omron, Black & Decker, Panasonic and Honeywell.”
Strong fourth quarter revenue driven by EMEA region
3D Systems reported a 21% increase in net revenue to a total of $187.4 million in 4Q14. On a GAAP (generally accepted accounting principles) basis, the company reported earnings of $0.01 per share.
Despite the foreign currency headwinds, the company reported robust revenue growth from the EMEA (Europe, Middle East and Africa) region—compared to lower channel productivity from the North America region.
During the fourth quarter, the direct metals segment’s performance increased by 178%. The healthcare segment’s performance rose by 96%. Consumer revenue grew by 68%.
To gain portfolio exposure to 3D Systems, you could invest in an ETF like the iShares Russell 3000 ETF (IWV). 3D Systems and Stratasys (SSYS) both form 0.01% of IWV’s portfolio, respectively.
Financial outlook for 2015
In terms of outlook, in its fourth quarter earnings release, the company said that “Management expects 2015 revenue to be in the range of $850 million to $900 million, with a greater percentage of revenue generated during the second half, GAAP earnings per share in the range of $0.35 to $0.45 and non-GAAP earnings per share to be in the range of $0.90 to $1.10.”
HP forays into 3D printing space
Hewlett-Packard (HPQ), or HP, backed by its strong financial position, plans to invest in the 3D printing space. With its funds and expertise, HP can mass produce 3D printers economically and market them through its distribution channel. HP will provide tough competition for 3D Systems and Stratasys in the 3D printing space. Read more about HP’s entry into the 3D space in HP: A new leader in the 3D printing market.
About 3D Systems
3D Systems provides the most advanced and comprehensive 3D digital design and fabrication solutions including 3D printers, print materials, and cloud-sourced custom parts. Its powerful ecosystem empowers professionals and consumers everywhere to bring their ideas to life in material choices including plastics, metals, ceramics, and edibles. 3D Systems’ healthcare solutions include end-to-end simulation, training and planning, and printing of surgical instruments and devices for personalized surgery and patient specific medical and dental devices.
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