Digging Into 3D Systems Corporation (DDD) 2Q Earnings Miss

3D Systems Corporation (NYSE:DDD) reported disappointing second quarter earnings results on Thursday, July 31st. The firm posted $0.16 EPS for the quarter, undershooting the consensus analyst estimate of $0.18 by $0.02. 3D Systems took in revenues of $151.50 million in 2Q, compared to the consensus estimate of $162.30 million. In the second quarter last year, the firm reported $0.20 EPS. 3D Systems’s revenues increased 25.4% compared to 2Q 2013.

Digging Into 3D Systems Corporation (DDD) 2Q Earnings Miss

J.P.Morgan North America Equity Research issued a report on 3D Systems after the earnings release Thursday morning. JPM analyst Paul Coster points out that although DDD missed consensus analyst estimates, its 2Q numbers nearly exactly matched JPM’s EPS and revenue estimates of $0.16/$156mm).

He also notes that since the company does not issue quarterly guidance, it’s unfair to be too critical of a relatively small quarterly miss. Coster goes on to say, however, that a mere 10% organic growth is a concern for investors in the 3D space. He concludes by saying that although low growth concerns are mitigated by the fact that 3D Systems Corporation (NYSE:DDD) product cycle appears to be reaccelerating, the second quarter report does raise questions and up the risk of investing in the company going forward.

FY2014 3D Systems guidance

3D Systems Corporation (NYSE:DDD) updated EPS guidance of $0.73-0.85 for fiscal year 2014. That compares to the Thomson Reuters consensus EPS estimate of $0.81. The firm also issued revenue guidance of $700-740 million, in the ballpark of the consensus analyst estimate of $714.38 million.

The report highlights that 3D Systems management cited the pending impact of Robtec and Simbionix acquisitions, record bookings and rising orders for consumer products for the relatively broad range of revenue guidance. Coster concludes by saying: “Much hinges on execution of multiple product introductions in 2H; we think risks are high.”

JPM rates 3D Systems Neutral

An earlier JPM report published on July 2nd had rated 3D Systems Corporation (NYSE:DDD) as a Buy with a price target of $54.50, but after today’s second quarter report, JPM has downgraded the firm to Neutral and recommended investors avoid DDD shares for the time being.