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3D Systems (DDD) Incurs Loss in Q3, Revenues Beat Estimates

Aniruddha Ganguly
·3 min read

3D Systems DDD reported third-quarter 2020 non-GAAP loss of 3 cents per share, beating the Zacks Consensus Estimate by 62.5%. Moreover, the bottom line was narrower than the year-ago quarter’s loss of 4 cents per share.

Revenues of $135.1 million beat the consensus mark by 16.6% but declined 13% year over year.

Revenues from products division (57.2% of revenues) declined 18.2% year over year to $77.3 million. Services revenues (42.8% of revenues) fell 4.7% from the year-ago quarter to $57.9 million.

Quarterly Details

Healthcare segment revenues increased 6.1% year over year to $59.8 million. Robust dental end-market drove top-line growth.

Industrial division revenues plunged 23.8% year over year to $75.3 million.

 

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

 

In the reported quarter, non-GAAP gross margin contracted 90 basis points (bps) year over year to 43.5%. Products gross margin decreased primarily due to the under-absorption of supply chain overhead, resulting from lower production. However, services gross profit margin improved.

In the third quarter, 3D Systems’ non-GAAP operating expenses dropped 15.2% year over year to $58.8 million. This year-over-year decline was primarily driven by savings achieved from cost restructuring activities as well as reduced hiring and lower travel expenses due to the coronavirus pandemic.

Selling, general and administrative expenses as a percentage of revenues increased 620 bps to 43.7%. Research & development expense as a percentage of revenues increased 50 bps to 14%.

 

Balance Sheet Details

As of Sep 30, 2020, 3D Systems had cash and cash equivalents of $75.3 million compared with the $63.9 million recorded at the end of the previous quarter.

3D Systems had unused revolving credit facility worth $100 million with roughly $30.6 million available currently.

Total debt was $21.7 million as of Sep 30, 2020.

Moreover, under its at-the-market equity program (ATM program), the company issued $25 million of common stock during the reported quarter. Notably, $125 million is currently available under the ATM program.

Zacks Rank and Stocks to Consider

Currently, 3D Systems carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector are CMC Materials CCMP, Covetrus CVET and NVIDIA NVDA. All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Covetrus and CMC Materials are set to report their quarterly earnings on Nov 10 and 11, respectively. NVIDIA is set scheduled to report the same on Nov 18.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
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