3D Systems Corporation Q1 Earnings Preview: What To Expect

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3D Systems Corporation Q1 Earnings Preview: What To Expect
Image Credit: 3D Systems Corporation

3D Systems is scheduled to report its fiscal first quarter results on Thursday, May 5th before the market opens. The 3D printing company had surprised the Wall Street with higher than expected earnings in December quarter. However, 3D Systems had not issued guidance for the first quarter due to uncertain industry outlook. So, what to expect when the Rock Hill company reports its Q1 results on Thursday?

Q1 revenues expected to decline 2.8% YoY

Analysts on average estimate EPS of 5 cents. Revenues are expected to decline 2.8% year-over-year to $156.3 million. 3D Systems had reported a revenue of $160.72 million in the same quarter a year ago. Citigroup analyst Kenneth Wong said in a research note that his industry checks suggest 3D Systems’ business is “still fairly negative.” That is expected, given the current market environment.

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Beyond the headline numbers, investors will focus on the macro picture. The company witnessed a decline in demand for 3D printers throughout 2015. Weak printer sales lead to poor material sales, which may affect its gross margins. Improved printer sales during the March quarter would signal a healthy demand ahead. 3D Systems has exited the consumer business to focus on the industrial and professional 3D printing markets.

Where will Vyomesh Joshi take 3D Systems?

Investors would also want to hear about the newly appointed chief executive Vyomesh Joshi’s vision and strategy for the company’s future. Joshi has spent more than three decades at HP. He led HP’s $26 billion imaging and printing business, doubling its profits in 11 years. He has a proven track record in turning around ailing businesses, and Wall Street has already given him a thumbs up.

Last month, Vyomesh Joshi said in an interview with Re/Code that 3D Systems’ culture had become fragmented due to dozens of acquisitions, which needs to be fixed. Joshi added that he was looking to fix the operational and product quality issues. He would focus mainly on aerospace, healthcare and automobile markets. Companies in these sectors want machines that they can keep up and running 24×7, so product quality is extremely important.

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