Trouble Ahead as ExOne (XONE) Warns on Full-Year Revenue (Update 1)

Updated to reflect share price change after stock resumed trading.

NEW YORK (TheStreet) -- ExOne (XONE) shares plummeted once it resumes trading in extended hours on Tuesday. The stock dumped 14.1% to $53.49, adding to falls of 5.4% suffered over the day.

The 3d printing company warned full-year 2013 revenue would be between $40 million and $42 million, below previous guidance of $48 million. Based on the year's results, fourth-quarter revenue would fall in the range of $11.2 million to $13.2 million.

Analysts surveyed by Thomson Reuters had anticipated fourth-quarter revenue of $19.63 million and full-year sales of $48.32 million.

The shortfall is related to machine sales yet to be completed for customers in Russia, India, Mexico and France. Those sales still needing approval processing will be deferred into 2014.

"While naturally we are disappointed with this shift in timing for these machines, we remain enthusiastic with the growing interest in the ExOne binder jetting technology from our global customers for all industrial material applications. We believe that these machine sale delays are only due to timing and no other factor. We also expect to quadruple production and triple sales of the M-Flex in 2014," said CEO S. Kent Rockwell in a statement.

The Pennsylvania-based business is due to report fourth-quarter and full-year results on March 19.

Over Tuesday's session, the small-cap saw losses after larger rival Statasys (SSYS) provided mixed 2014 revenue guidance.

Israel-based Stratasys announced net income over the fiscal year ending December would be between $2.15 and $2.25 a share, compared to consensus of $2.31 a share. The company said profitability would likely take a hit over the year as operating expenses expand significantly.

By market close, Stratasys shares tumbled 8.2% and took off an additional 3.2% to $115.50 in after-hours trading. Competitor 3D Systems (DDD) has lost 5% to $86.61 and Voxeljet  (VJET) plunged 7.4% to $39.30 in extended trading.

TheStreet Ratings team rates STRATASYS LTD as a Hold with a ratings score of C+. The team has this to say about their recommendation:

"We rate STRATASYS LTD (SSYS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SSYS's very impressive revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues leaped by 152.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SSYS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.94, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for STRATASYS LTD is rather high; currently it is at 63.63%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.27% is in-line with the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 227.8% when compared to the same quarter one year ago, falling from $5.18 million to -$6.63 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, STRATASYS LTD's return on equity significantly trails that of both the industry average and the S&P 500.

TheStreet Ratings team rates 3D SYSTEMS CORP as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate 3D SYSTEMS CORP (DDD) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 49.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although DDD's debt-to-equity ratio of 0.02 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.40, which clearly demonstrates the ability to cover short-term cash needs.
  • 3D SYSTEMS CORP has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, 3D SYSTEMS CORP increased its bottom line by earning $0.47 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus $0.47).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Computers & Peripherals industry average. The net income increased by 30.6% when compared to the same quarter one year prior, rising from $13.52 million to $17.66 million.
  • Net operating cash flow has increased to $31.64 million or 39.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.76%.

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