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Voxeljet (VJET) to Report Q1 Earnings: What's in the Cards?

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Voxeljet AG VJET is scheduled to report first-quarter 2018 results on May 17.

The company has a dismal earnings surprise history, having missed estimates in each of the trailing four quarters. In the last reported quarter, it delivered a negative earnings surprise of 33.3%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Voxeljet’s first-quarter 2018 results are likely to benefit from its cost-saving initiatives. Also, the company’s large scale service centers globally, including the opened subsidiaries in China and India, are expected to bolster growth. In the fourth quarter of 2017, Voxeljet experienced improvement in revenues from its American and Chinese service centers. This upside was driven by increased market penetration in the respective regions and growing customer base.

Revenues from the company’s Services segment also showed signs of improvement in fourth-quarter 2017. Evidently, the metric increased 26.5% to €2.9 million from €2.3 million in the year-ago period. Voxeljet’s gross profit and gross profit margin too increased in the fourth quarter of 2017 on a year-over-year basis. We believe that improved operational execution is likely to drive the company’s bottom-line performance in the soon-to-be-reported quarter.

This apart, Voxeljet’s solid investment in core R&D to maintain its position as a technology leader in 3D printing bodes well for upcoming quarters.

However, over the past couple of years, the 3D printing industry has been suffering from a prolonged decline in demand for 3D printers. Revenues from the company’s System segment (including sales of 3D printers) declined 20% to €3.1 million in fourth-quarter 2017 from €3.9 million in the year-ago quarter. The waning demand for printers has added to the company’s concerns, which might reflect poorly on the coming quarterly results.

Furthermore, Voxeljet has been suffering from a decline in total backlog of 3D printer orders over the past few quarters. For instance, the company’s total backlogs dropped 26.8% in fourth-quarter 2017 compared with its level at the end of 2016. Other headwinds, including inflation, currency fluctuations and commodity prices vagaries have also marred the performance of several companies in the industry. We expect Voxeljet’s first-quarter 2018 results to be adversely affected by these factors.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Voxeljet this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Voxeljet has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

voxeljet AG Price and EPS Surprise

voxeljet AG Price and EPS Surprise | voxeljet AG Quote

Zacks Rank: The company has a Zacks Rank #3. This, combined with the company’s ESP of 0.00%, makes surprise prediction difficult.

Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

NetApp, Inc. NTAP has an Earnings ESP of +0.83% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Adobe Systems Inc. ADBE has an Earnings ESP of +0.45% and a Zacks Rank of 2.

DXC Technology Co. DXC has an Earnings ESP of +0.45% and a Zacks Rank #2.

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