3D Systems (DDD), the struggling manufacturer of 3-D printers, is doing all it can to turn around a steep share-price decline of more than two years.
And Wall Street is reluctant to buy into the promises of its new CEO, Vyomesh Joshi, an industry veteran with an 11-year track record at HP (HPQ). Joshi, who served as vice president of HP's imaging and printing businesses replaced Avi Reichental at the helm of 3D Systems earlier this month
DDD shares jumped as much as 6% in premarket earnings Thursday, off a modest earnings beat, before plummeting in morning trading.
The Rock Hill, S.C., manufacturer and distributor of 3-D printers booked adjusted earnings per share for the quarter of $0.05, topping consensus estimates by 1.4%, on sales of $152.6 million, which missed forecasts by about 2.2%, based on Bloomberg consensus data.
But the short-run earnings beat belies deeper systematic problem at 3-D, whose shares have declined 86% since the beginning of 2014. (3-D Systems is a member of Real Money's "Stressed Out" watch list.)
Part of the problem is that Joshi's announcement of a $17 million loss for the quarter adds to $55 million in losses over the past 12 months. That's a far cry from roughly $58 million in healthy income back in 2013.
Meanwhile, the company's $170 million cash on hand is down 15% year over year. The company's liquidity also includes an untapped $150 million revolving credit facility, which essentially functions as a corporate credit card.
"As a company, we recognize we have a lot of work to do, and that we have to do it fast" Joshi said on Thursday's earnings call with analysts, noting his first priority is to improve quality in order to keep clients from balking for larger manufacturers who are entering the 3-D printing scene, such as Hewlett Packard and General Electric (GE). (General Electric is a member of Jim Cramer's Action Alerts PLUS charitable trust.)
"So as far as HP, I'm born and raised in Hewlett-Packard," he said, reflecting on an 11-year tenure in HP's printing division. "No doubt they will bring a quality printer to market. It will be a formidable competitor," he added.
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