Stressed Out: 3-D Printing and Semiconductors Are Getting Slammed

 | Jan 28, 2016 | 12:12 PM EST
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This article is part of a Real Money series on 20 companies investors should consider adding to their distressed watch list.

Semiconducter producers and 3-D printers have been getting crushed, lately.

Advanced Micro Devices (AMD) is certainly one to keep on your list of distressed names, and is included in Real Money's index of 20 distressed companies.  

The Sunnyvale, Calif.-based semiconducter procucer has posted losses for the past five quarters (down $485 million total in 2015), and Wall Street expects another big one on in the first quarter.

Cash has also been running off the books, with only $785 million reported in December, down 25% on the previous year.

Advanced Micro is a story of a revenue recession, not a cost problem. Sales of $4 billion last year are down 28% from 2014.

And its stock price shows it. Shares are down more than 29% since the end of December.

Even the big producers are struggling amid waning demand and transformation in the personal-computer market. Intel (INTC) shares are down more than 11% over the last 12 months.

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"Revenue was $958 million, down 10% sequentially, driven primarily by seasonally lower sales of semi-custom SoCs, partially offset by higher Computing and Graphics segment sales," CFO Devinder Kumar said on the latest earnings call. "The year-over-year decline was 23% -- due primarily to lower client processor and chipset sales and lower game consoles royalties."

The 3-D world has also been bleak, as 3D Systems (DDD), also part of the distressed index, has plummeted 74% over the past 12 months, prompting investors to lose confidence in the consumer appeal of being able to design and print personalized devices.

3D Systems also lost more than half its cash over the last year, posting only $157 million in the third quarter, versus $377 million the year prior.

The Rock Hill, S.C.-based manufacturer of 3-D printers points to waning global demand. It continues to market its devices to education and desktop markets, and sees renewed potential in healthcare. 

"We're disappointed with our overall results and the lower revenue from our 3-D printing products and services, which we believe were negatively impacted by continued challenging market conditions that extended customers' capital investment cycles and reduced demand across all geographies," CEO Andrew Johnson said on 3D System's third-quarter earnings call. "However, despite these challenging conditions, we still observed a few bright spots," he added, pointing to increasing demand in the healthcare market.

Only time will tell if either company can come through on their turnaround efforts, but if they don't start turning profits soon, even more shareholders will flee from their plummeting stocks.

For more on Real Money's 20 distressed companies to watch:

Stressed Out: Introducing Real Money's Distressed Index

Stressed Out: Why the Big Steelmakers Are Tanking Today

Stressed Out: Is Avon Using Vanishing Cream on Its Cash?

Stressed Out: Sprint Is Collapsing Under the Weight of Its High-Yield Debt

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