Stratasys Inc.
(
SSYS
) reported fourth-quarter 2012 earnings per share of 40 cents,
beating the Zacks Consensus Estimate of 27 cents.
Revenue
Stratasys recorded total revenue of $96.4 million in the
fourth quarter, up 23.0% from $78.3 million in the year-ago
quarter. The company witnessed improvements in both product and
services revenue.
In the reported quarter, Product revenue grew significantly by
64.2% with the year-ago quarter. The upside was driven by
substantial growth in the company's system and consumable
earnings. This apart, Services revenue increased by 58.6% in the
fourth quarter of 2012, attributable to the improvement in demand
for the company's higher price for Fortus 3D Production Systems
and broad portfolio of PolyJet.
Operating Results
Gross profit stood at $32.8 million (46.1% of the total
revenue) in the quarter, up 32.6% from $22.9 million (52.5% of
the total revenue) in the year-ago quarter. The gross margin
declined as revenue increased at a lower rate than the cost of
sales.
Operating loss in the quarter was $4.2 million versus $5.8
million in the fourth quarter of 2011. However, operating expense
increased 170.9% year over year, primarily due to higher R&D
and SG&A expenses. Operating margin plummeted to a loss of
7.0% from operating profit margin of 20.4% in the year-ago
quarter. The company's product mix affected its operating
margin.
The company reported net loss of $3.5 million or 9 cents per
share in the fourth quarter compared with a loss of $6.30 million
or 17 cents per share in the prior-year quarter. Non-GAAP net
income was $16.3 million or 40 cents per share in the reported
quarter compared to a profit of $11.6 billion or 30 cents.
Balance Sheet
The company exited the quarter with cash and cash equivalents
of $153.9 million, up from $51.2 million in the previous quarter.
The company does not have any long-term debt.
Guidance
The company provided its guidance for fiscal 2013, wherein,
revenue is expected in the range of $430.0 million to $445.0
million, while the Non-GAAP earnings are anticipated to be $1.80
to $1.95 per share. Moreover, GAAP loss is expected in the range
of 41 cents to 16 cents per share.
Conclusion
The fourth-quarter results were encouraging with EPS exceeding
the Zacks Consensus Estimate and revenues improving on a
year-over-year basis. Moreover, growth in product and services
revenue helped the company expand its business substantially.
Previously, the company had stated that
Hewlett-Packard
(
HPQ
) agreed to discontinue its manufacturing and distribution
agreement for 3D printers. The discontinuation has been effective
since the end of 2012.
Despite a globally increasing demand for 3D printers,
Stratasys does not expect the termination to have a material
impact on the business fundamentals. However, we are a bit
apprehensive about the company's high-cost business model and
stiff competition from big and small players like
3D Systems Corp.
(
DDD
).
The company has a Zacks Rank #3, (Hold) on the stock.
Symantec Corp.
(
SYMC
), with a Zacks Rank #1 (Strong Buy), might be worth considering
at this point.
3D SYSTEMS CORP (DDD): Free Stock Analysis
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HEWLETT PACKARD (HPQ): Free Stock Analysis
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STRATASYS LTD (SSYS): Free Stock Analysis
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SYMANTEC CORP (SYMC): Free Stock Analysis
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