(Adds details from conference call, analyst's comment; updates
April 29 3D printer maker 3D Systems Corp's
quarterly gross margins fell for the first time in two
years, raising concerns about its growth prospects in an
industry, which is drawing the attention of bigger technology
3D Systems shares fell as much as 11 percent, making the
stock one of the top losers on the New York Stock Exchange on
The company said on Tuesday that its gross margin expansion
was being delayed as it printers continued to be a major source
3D Systems printers, priced at less than $1,000 to about $1
million, generate lower gross margins than its printing
materials and services.
The company also said it now expects to get most of the
revenue and profit it forecast for 2014 in the second half of
the year when it launches new products and services.
The nascent 3D printer industry has generated widespread
interest in the last couple of years. It has, however, also
drawn criticism from some analysts for being overhyped and
HP Co, which plans to tap into the market, said in
March it would focus on selling to businesses, rather than on
making cheaper consumer printers.
"We take companies like HP very seriously, we also don't
underestimate the degree of complexity that they would have to
position themselves as a relevant and meaningful player," Chief
Executive Avi Reichental said.
3D Systems reported a better-than-expected 45 percent jump
in first-quarter revenue, but gross margin fell 130 basis points
to 51.1 percent.
The company's revenue increased to $147.8 million in the
quarter ended March 31 from $102.1 million. Sales of 3D printers
rose 60 percent to $50.7 million.
"... As we place more printers faster, we expect an overall
gross profit margin expansion trend over the next few periods,"
Chief Financial Officer Damon Gregoire said on a conference call
Gregoire said faster growth in printing material sales and
higher revenue contributions from software and services would
Net income attributable to 3D Systems fell to $4.9 million,
or 5 cents per share, in the quarter from $5.9 million, or 6
cents per share, a year earlier.
Excluding items, the company earned 15 cents per share, in
line with analysts' average expectation.
3D Systems, which named Black Eyed Peas rapper will.i.am
chief creative officer in January, reaffirmed its full-year
forecast of adjusted earnings of 73 cents-85 cents per share on
revenue of $680 million-$720 million.
The company's shares, which have lost nearly half their
value this year, were trading at $43.73 in afternoon trading on
Tuesday. Shares of rival Stratasys Ltd's fell as much
as 6 percent while those of ExOne Co fell 5 percent.
3D Systems stock traded at almost 19 times its earnings,
while that of Stratasys traded at 25 times, according to Thomson
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by
Saumyadeb Chakrabarty and Joyjeet Das)