) reported second quarter 2012 earnings per share of 32 cents,
beating the Zacks Consensus Estimate of 24 cents.
Stratasys recorded total revenue of $49.4 million in the second
quarter, up 31.0% from $37.8 million in the year-ago quarter. The
quarter's revenue was particularly driven by the 126% year-on-year
spike in sales of the company's higher margin Fortus 3D production
systems. Consumable revenue jumped 34% year-over-year, which was
also boosted by the strong performance of Fortus.
Incremental use of direct digital manufacturing applications,
which provides comparatively higher utilization rate, continued to
help the consumable segment's revenue.
Looking at the segments,
came in at $41.4 million, up 35.2% from $30.7 million reported in
the year-ago quarter.
revenue jumped 11.8% to $7.96 million from $7.13 million in the
Gross profit stood at $26.2 million (52.9% of the total revenue)
in the quarter, up 32.6% from $19.7 million (52.2% of the total
revenue) in the year-ago quarter. The gross margin improvement was
due to efficient cost reduction measures.
Operating income in the quarter was $5.8 million versus $6.1
million in the second quarter of 2011. However, operating expense
increased 49.3% year over year, primarily due to higher R&D and
SG&A expenses. Operating margin of 11.7% dropped from 16.1% in
the year-ago quarter. The company is offering lower-margin
products, which has resulted in the reduction of margin.
The company reported net income of $3.02 million or 14 cents per
share in the second quarter compared with $3.99 million or 18 cents
per share in the prior-year quarter. Non-GAAP net income was $7.0
million or 32 cents per share in the reported quarter.
The company exited the quarter with cash and cash equivalents of
$51.2 million, up from $24.4 million in the previous quarter. The
company does not have any long-term debt.
The company revised its guidance for fiscal 2012. Revenues are
now expected in the range of $193.0 million to $198.0 million,
versus previous guidance of $183.0 million to $193.0 million.
Non-GAAP earnings are projected to be between $1.31 and $1.38
per share, versus previous guidance of $1.29 to $1.38 per share.
The company expects GAAP earnings between 83 cents and 98 cents per
share, versus previous GAAP guidance of 97 cents to $1.13 per
Zacks Estimates for third quarter and fiscal 2012 was 43 cents
and $1.72 respectively.
The second quarter results were encouraging with EPS exceeding
the Zacks Consensus Estimate and revenues improving on a
year-over-year basis. Moreover, the revenue growth in the Fortus 3D
production systems helped revenue grow substantially.
Moreover, the company recently disclosed that, HP has agreed to
discontinue their manufacturing and distribution agreement for 3D
printers, effective at the end of 2012. Stratasys does not expect
the contract termination to have a material impact on the business
fundamental of the company.
However, we are a bit apprehensive about the company's high-cost
business model and stiff competition from big and small players
3D Systems Corp.
). Nonetheless, the acquisition of Objet is expected to improve the
growth of 3D systems business.
The company has a Zacks #3 Rank, which implies a short-term Hold
rating on the stock.
3D SYSTEMS CORP (DDD): Free Stock Analysis
STRATASYS INC (SSYS): Free Stock Analysis
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