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3D Systems (DDD) Earnings & Revenues Miss Estimates in Q2

·5 min read

3D Systems DDD reported second-quarter 2022 non-GAAP loss of 7 cents per share, missing the Zacks Consensus Estimate of break-even. The bottom line compared unfavorably with the prior-year quarter’s earnings of 12 cents per share.

In the second quarter of 2022, 3D Systems reported revenues of $140 million, down 13.8% from the year-ago quarter but up 5.3% from the previous quarter. Excluding the impact of business divestments in 2022 and on a constant currency basis, revenues increased 7.8% year over year. The top line lagged the consensus mark of $149.1 million for the second consecutive quarter.

3D Systems’ second-quarter performance reflected impacts of inflationary pressure, foreign exchange risks and supply chain disruptions, among other ongoing macroeconomic constraints.

3D Systems Corporation Price, Consensus and EPS Surprise

3D Systems Corporation Price, Consensus and EPS Surprise
3D Systems Corporation Price, Consensus and EPS Surprise

3D Systems Corporation price-consensus-eps-surprise-chart | 3D Systems Corporation Quote

Quarter in Detail

In the second quarter, product revenues represented 74% of the total revenues and decreased 4.5% to $103.8 million. Revenues from Services, which accounted for 25.9% of revenues, plunged 32.7% year over year to $36.3 million.

Revenues from the Healthcare segment fell 13.4% year over year to $71.7 million. The figure increased 11.5% from the prior quarter. Excluding the impact of business divestments, the segment’s revenues increased 4.7% year over year.

The industrial division revenues decreased 14.3% year over year to $68.3 million and 0.6% sequentially. Excluding the impact of business divestments, the unit’s revenues increased 11.2%. The company witnessed solid demand for products as well as materials.

Operating Details

During the second quarter of 2022, 3D Systems’ non-GAAP gross profit decreased 5.2% year over year to $53.3 million. Consequently, non-GAAP gross profit margin contracted 330 basis points (bps) to 38.1%. This decrease was driven by year-over-year product mix changes due to divestitures and increased supply chain disruptions.

Non-GAAP operating expenses increased 24.5% to $60.9 million. The increase was due to spending related to future growth, which includes expenses from acquisitions, research and development, and corporate infrastructure.

Non-GAAP operating loss was $7.6 million versus the year-ago operating income of $7.3 million.

Adjusted EBITDA was negative $2.6 million. The margin of negative 1.9% reflected the inflationary impact on input costs and gradual investments for portfolio & business growth.

Balance Sheet Details

The company exited the second quarter with cash, cash equivalents and short-term investments of $638.2 million, lower than the prior quarter's $745.6 million. As of Jun 30, 2022, 3D Systems had a total debt of $448.1 million, slightly up from the previous quarter’s $447.5 million.

In the first six months of 2022, the company utilized $38.2 million of cash from operational activities.

Guidance

3D Systems once again trimmed its full-year 2022 guidance. The company now expects revenues between $530 million and $570 million, compared with the previously expected band of $580 million to $625 million. It now projects non-GAAP gross margin to be 39-41% rather than the previously estimated 40-43%.

Non-GAAP operating expense is estimated to be $245-$250 million, raising the lower end from the earlier projection of $235-$250 million.

Management provided this guidance with the assumption that the pandemic, supply chain disruptions or any geopolitical events will not be of any concern in 2022.

Zacks Rank & Key Picks

3D Systems currently carries a Zacks Rank #3 (Hold). Shares of DDD have slumped 53.3% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector are Taiwan Semiconductor TSM, Clearfield CLFD and Silicon Laboratories SLAB, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Taiwan Semiconductor's third-quarter 2022 earnings has been revised 10 cents northward to $1.70 per share over the past 30 days. For 2022, earnings estimates have moved 41 cents north to $6.30 per share in the past 30 days.

TSM's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.9%. Shares of the company have decreased 25.6% in the past year.

The Zacks Consensus Estimate for Clearfield's fourth-quarter fiscal 2022 earnings has been revised upward by 10 cents to 80 cents per share over the past 30 days. For fiscal 2022, earnings estimates have moved 36 cents north to $3.13 per share in the past 30 days.

Clearfield’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 33.9%. Shares of CLFD have soared 159% in the past year.

The Zacks Consensus Estimate for Silicon Laboratories’ third-quarter 2022 earnings has increased 22.9% to $1.02 per share over the past 30 days. For 2022, earnings estimates have moved 14.2% up to $4.18 per share in the past 30 days.

Silicon Laboratories’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 63.6%. Shares of SLAB have decreased 3.7% in the past year.


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