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3D Systems (DDD) Q3 Earnings Meet Estimates, Revenues Up Y/Y

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3D Systems (DDD) Q3 Earnings Meet Estimates, Revenues Up Y/Y

3D Systems (DDD) third-quarter results benefit from strong growth in healthcare and printer unit sales.

3D Systems Corporation DDD third-quarter 2018 non-GAAP earnings of 2 cents per share came in line with the Zacks Consensus Estimate. The company incurred a loss of 20 cents in the year-ago quarter.

This 3D printer maker reported revenues of $164.5 million in the quarter, reflecting a year-over-year increase of 8%. Steady demand for the company’s healthcare, materials, software and on-demand manufacturing, along with increased printer unit sales proved conducive for the top line. However, revenues missed the Zacks Consensus Estimate of $170 million.

3D Systems Corporation Price, Consensus and EPS Surprise

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

Positive reception of new products was a tailwind in the quarter.  Moreover, the potential launch of products in 2019 makes management optimistic.

Quarter Details

3D Systems’ Healthcare revenues were up 14% to $53.1 million year over year, driven by growth across all categories. The company began shipping NextDent 5100 printers during the quarter.

However, the company’s on-demand manufacturing revenues fell 3% to $26.3 million due to change in sales approach, which was undertaken during the quarter. Management notes that this is likely to remain an overhang in the fourth quarter.

Software revenues increased 8% year over year to $22.9 million. Material revenues jumped 2% to $40.3 million.

Printer revenues climbed 17% to $34.5 million. Meanwhile, printer unit sales surged 93%.

In the reported quarter, GAAP gross margin expanded 900 basis points on a year-over-year basis to 47.3%, driven by supply chain cost optimization initiatives.

In the third quarter, the company’s non-GAAP operating expenses decreased 3% to $73.7 million. Notably, the company’ non-GAAP SG&A and R&D expenses decreased 1% and 6% to $50.8 million and $22.8 million, respectively.

Cash Flow and Balance Sheet

3D Systems ended the third quarter with cash and cash equivalents of $92.1 million, down from $119.3 million in the previous quarter. The company used $2.9 million of cash in operational activities against $10.7 million of cash generated a quarter ago.

Zacks Rank and Stocks to Consider

3D Systems currently carries a Zacks Rank #3 (Hold).

A few stocks worth considering in the broader Computer and Technology sector are Intel Corporation INTC, Twitter, Inc. TWTR and CyberArk Software Ltd. CYBR, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Intel, Twitter and CyberArk is projected to be 8.42%, 22.05% and 19.83%, respectively.

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