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Brean Capital: 3D Systems Guidance Delay Is Not Surprising

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In a report published Thursday, analysts at Brean Capital maintained their Hold rating on 3D Systems Corporation (NYSE: DDD). The company's March quarter results did not come as a surprise, given the pre-announcement.

The delay in 3D Systems updating its 2015 guidance was also not surprising, "given our contention that the environment remains sufficiently soft in the context of taking out costs," the analysts said.

For the March quarter, the company reported its revenue and EPS in-line with its pre-announcement. However, gross margins rose, quarter on quarter, while operating margins declined. The analysts expressed their disappointment with the decline in organic revenue, especially given the expectations that 3D Systems would grow its organic revenue following two years of decline.

"Encouragingly, DDD noted that through this point in the April Q they have seen order activity stronger than they had seen to begin the Mar Q, which had been off to a good start," the analysts stated.

The company is currently focusing on cost efficiency programs to help improve gross margins and opex through 2015. 3D Systems expects gross margins to expand through each quarter of the year, with a concomitant decline in opex. In addition to these initiatives, the company also intends to focus on becoming more "partner-centric" with its resellers and "exhibit more responsible control throughout the "order to delivery" cycle," according to Brean Capital.

Latest Ratings for DDD

DateFirmActionFromTo
Nov 2017PiperJaffrayUpgradesUnderweightNeutral
Nov 2017CitigroupMaintainsSell
Nov 2017JP MorganMaintainsNeutral

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Posted-In: Brean Capital VetrAnalyst Color Reiteration Analyst Ratings

 

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