(Reuters) - 3D Systems Corp’s quarterly profit missed the average analyst estimate, as higher costs associated with the launch of new products ate into the three-dimensional printer maker’s profit margins.
The company’s shares fell as much as 14 percent in heavy morning trading, making it one of the top percentage losers on the New York Stock Exchange.
3D Systems is still absorbing the costs it incurred while launching a number of new products over the past few quarters, Janney Montgomery Scott analyst John Baliotti told Reuters, adding that not all of these products had started selling yet.
3D Systems had said in April that it expected to get most of the revenue and profit it forecast for 2014 in the second half of the year.
The company now expects to liquidate $15.1 million of new product inventory buildup by the end of 2014, Chief Financial Officer Damon Gregoire said on a post-earnings conference call on Thursday.
“The second half of the year should show the benefit of the costs they incurred in the first half,” Baliotti said. 3D Systems’ operating costs rose more than 50 percent to $68 million in the second quarter ended June 30.Product launches and the company’s attempts to increase its manufacturing capacity also weighed on gross margins, which shrank 4 percentage points to 47.8 percent.
The nascent 3D printer industry has generated a lot of investor interest over the past couple of years, but has also drawn criticism from some analysts for being over-hyped and immature.
Net income attributable to the company fell to $2.1 million, or 2 cents per share, from $9.3 million, or 10 cents per share, a year earlier.
Excluding items, the company earned 16 cents per share.
Revenue rose to $151.5 million from $120.8 million.
Analysts on average had expected a profit of 18 cents per share on revenue of $162.3 million, according to Thomson Reuters I/B/E/S.
3D Systems said it now expects 2014 revenue of $700 million-$740 million, up from $695 million to $735 million.
Analysts on average expect the company to post full-year revenue of $713.8 million.
3D Systems shares were down trading down 9.6 percent at 50.69.
Shares of rival 3D printer makers Voxeljet AG, Exone Co and Statasys Ltd were down more than 4 percent on Thursday.
Additional reporting by Lehar Maan in Bangalore; Editing by Joyjeet Das and Simon Jennings