Stratasys Reports In-Line 1Q - Analyst Blog

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Stratasys Inc. ( SSYS ) reported earnings per share of 26 cents in the first quarter of 2012, beating the Zacks Consensus Estimate.

Revenue

Stratasys reported total revenue of $45.0 million in the first quarter of 2012, up 30.0% from $34.6 million in the year-ago quarter. The company saw substantial revenue growth, with revenues from the consumable segment expanding 30%. The company also witnessed 61.0% year-over-year sales growth from the Fortus 3D production system.

The company recorded a record jump in system shipments, which stood at 822 units for the first quarter of 2012 compared with 567 units for the same period last year.

Segment wise, revenues from Products came in at $37.5 million, up 33.6% from $28.10 million reported in the year-ago quarter. Services revenue jumped 14.4% to $7.4 million from $6.48 million in the year-ago quarter.

Operating Results

Gross profit stood at $23.0 million (51.0% of the total revenue) in the quarter, up 25.8% from $18.3 million (52.8% of the total revenue) in the year-ago quarter. Significant gross margin improvement was due to efficient cost reduction measures.

Operating income in the quarter was $7.2 million versus $6.2 million in the first quarter of 2011. However, operating expense increased 30.1% year over year, primarily due to higher R&D and SG&A expenses. Operating margin of 34.9% remained flat on a year-over-year basis. The company is offering higher-margin products, which helped them to keep their margin intact.

The company reported net income of $4.5 million or 21 cents per share in the first quarter compared with $5.0 million or 23 cents per share in the prior-year quarter. Non-GAAP net income was $5.6 million or 26 cents per share in the reported quarter.

Balance Sheet

The company exited the quarter with cash and cash equivalents of $24.4 million, up from $20.1 million in the previous quarter. The company does not have any long-term debt.

Guidance

For fiscal 2012, the company expects GAAP EPS to be in the range of 97 cents to $1.13, while the non-GAAP EPS would be $1.29 to $1.38.

Conclusion

The company reported impressive first quarter results with EPS matching the Zacks Consensus Estimate and revenue improving on a year-over-year basis. Moreover, the revenue growth in the consumable segment helped revenue grow substantially. Additionally, the company's new collaboration with technology-major Hewlett-Packard Company ( HPQ ) is expected to drive growth going forward.

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 ). Although the latest acquisition of Objet may add some value to its 3D systems business.

The company has a Zacks #1 Rank, which implies a short-term Strong-Buy rating on the stock.


 
3D SYSTEMS CORP (DDD): Free Stock Analysis Report
 
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
 
STRATASYS INC (SSYS): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: DDD , HPQ , SSYS

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