Brean Capital: 3D Systems Pre-Announcement 'Not Surprising', Maintains Buy Rating

said on Wednesday that it expects its third quarter revenue to be $164 million to $169 million, below the consensus estimate of $186 million. The company expects to earn $0.16 to $0.19 per share, also falling short of the consensus estimate of $0.21. In addition, 3D Systems lowered its full year 2014 guidance and now expects its revenue to be $650 million to $690 million while earning $0.70 to $0.80 per share. 3D Systems stated in its second quarter results on July 31 that it expects its revenue for the full fiscal year to be $700 million to $740 million. The company guided its earnings per share for the full fiscal year to be $0.73 to $0.85. Ananda Baruah of Brean Capital commented on 3D Systems' guidance in a note released mid-day. “September quarter was always at risk given implied Street Organic growth in the mid-20 percentage points, but we'd viewed the risk at approximately $10 million of revenues in the $175 million range,” Baruah wrote. The analyst described the company's shortfall as “not surprising” but the magnitude of the shortfall is indeed a surprise. The company attributed the miss to continued manufacturing capacity constraints for direct metals printers and delayed availability of its newest consumer products. According to Baruah, none of these are new issues and the analyst adds that the company has already brought online a second direct metal 3D printers' manufacturing line at the end of the third quarter and began commercial shipments of its printers. Shares are Buy rated with a $58 price target based on a “base-case” scenario.