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Why 3D Systems Corp. Shares Jumped More Than 35% Higher Today

Anders Bylund, The Motley Fool

What happened

Shares of 3D-printing and 3D-scanning specialist 3D Systems (NYSE: DDD) surged as much as 37.8% higher on Wednesday, following a strong second-quarter earnings report. By 3:25 p.m. EDT, the stock had cooled down slightly to a 35% gain over Tuesday's closing prices.

So what

In the second quarter, 3D Systems' top-line sales rose 11% above the year-ago period's reading, landing at $176.6 million. Your average analyst would have settled for roughly $166 million. Further down the income statement, adjusted earnings fell 25% year over year to $0.06 per share, but the Street had only been looking for a $0.01 profit per share.

The company's printer shipment volumes rose 37% year over year, following a 44% annual gain in the first quarter. Looking ahead, 3D Systems is ramping up its marketing and manufacturing efforts in support of several brand-new 3D-printing products, some of which are already shipping, while others will appear later in the year.

15 lifelike models of carnivorous dinosaurs, arranged on a glass table.

These fierce dinosaur models were printed by a 3D Systems Projet 7000 system. Image source: 3D Systems.

Now what

On the heels of a couple of difficult years with falling revenues and negative free cash flows, 3D Systems has now reported positive year-over-year revenue growth in five of the last six quarters. Trailing free cash flows are still negative as the company puts its back into the new product launches, which requires significant cash investments up front, but the company is on an upswing as a whole. This earnings report simply highlighted and underscored that general trend.

It's no surprise to see investors embracing this rock-solid report today, even if the magnitude of the price surge was a bit of a shocker.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.