Hewlett-Packard Co.’s (NYSE: HPQ) CEO Meg Whitman committed a boo-boo at last week’s annual meeting. Answering a shareholder question, Whitman said that HP would be entering the 3D printing business in June. Stocks of companies already in the 3D printing business promptly sagged.
Source: courtesy of Hewlett-Packard
It turns out what Whitman now wishes she had said was that the launch is likely to come in the fall. That is, in fact, what HP said in a blog over the weekend. And the shares of the 3D printer makers looked stronger.
3D Systems Corp. (NYSE: DDD) shares were up 2.4% to $59.36 on Tuesday, and up 4.5% since Friday. Stratasys Ltd. Shares (NASDAQ: SSYS) was up 0.5% to $107.58 on Tuesday, and 1.1% higher since Friday. ExOne Co. (NASDAQ: XONE) saw its shares rise nearly 1% to $35.55 on Tuesday — after falling nearly 20% over the prior three days.
The problem for HP is that its offerings in 3D printing are being held back by a number of big problems, starting with speed and quality.
There is another, bigger problem. Even if Hewlett-Packard launches a line of 3D printers, it is not clear how big a market there is for the products and what the business might mean to HP. Motley Fool analyst Steve Heller thinks the current market for 3D printers is about $3 billion in sales. It should grow to nearly $11 billion by 2021.
However, the consensus estimate is that HP will report $111 billion in revenue for the fiscal year that ends on Oct. 31. So don’t let your expectations get too high. For Hewlett-Packard, the 3D business will be tiny at first and will take years to evolve into something meaningful.
Even HP conceded the point. In a February interview, Martin Fink, the company’s chief technology officer and director of HP Labs, said, “We think consumers will first use print service providers — companies similar to FedEx Office — where people will send their 3D print jobs for high-quality fulfillment, and we’d be the ones to provide the equipment.”
Hewlett-Packard shares, meanwhile, were up 1.9% on Tuesday to $32.22, and they are up nearly 15% this year.
3D printing is a technology that is emerging, but it is still very new. While the expectations are high for the future, the future is a ways off and investors will need to be patient.
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