Stratasys Stumbles Over Earnings

Stratasys Ltd. (NASDAQ: SSYS) released its third-quarter financial results before the markets opened on Wednesday. The company had $0.01 in earnings per share (EPS) on $167.6 million in revenue, which compares to Thomson Reuters consensus estimates of $0.02 in EPS on revenue of $172.20 million. The same period from the previous year had EPS of $0.58 and $203.61 million in revenue.

In terms of guidance, the company expects to have a fourth-quarter net loss of $0.17 to $0.05 per share on revenue in the range of $160 million to $175 million. Consensus estimates call for $0.15 in EPS on $189.19 million in revenue for the quarter.

The company intends to adjust to the current market environment by implementing adjustments to its costs and operating structure, while remaining committed to a plan that it believes will help unlock the significant potential within the industry.

In addition to transforming its brand and go-to-market strategies, Stratasys is working on significant advancements for existing platforms, as well as the development of new capabilities and business models.

David Reis, CEO of Stratasys, commented on earnings:

Our third quarter results are a reflection of the difficult global macro-economic environment we have observed throughout the year that is negatively impacting most of our product lines. We believe the current environment is primarily a result of weak investment in capital equipment, which has combined with the negative impact of excess capacity that we believe was created during a period of extraordinary growth for Stratasys, and the overall industry, during 2013 and 2014. Additionally, although we believe that overall penetration in the prototyping market remains low, the segment has matured to an extent that our customers now have a wide selection of technology offerings to evaluate, resulting in lengthened sales cycles. Despite these near-term challenges, we continue to observe significant market potential, and remain confident in our long-term growth prospects.

On the books, cash, equivalents and short-term bank deposits totaled $262.5 million at the end of the third quarter, compared to $442.7 million at the end of December 2014.

Shares of Stratasys were up 5.6% at $28.76 Wednesday morning, with a consensus analyst price target of $31.06 and a 52-week trading range of $24.80 to $113.49.

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