Stratasys Ltd. (NASDAQ: SSYS) reported better-than-expected earnings for the third quarter of 2019, despite a decline in revenues. The company also lowered its full-year revenue guidance. The stock lost sharply during Wednesday’s pre-market trading session, following the announcement.
The company reported a 3% decline in third-quarter revenues to $157.5 million, lower than Wall Street’s projection of $162.1 million. The weakness is attributable to the ongoing slump in the automotive and industrial machinery market in Europe and Asia.
On an unadjusted basis, the Rehovot, Israel-based 3D printer maker reported a net loss of $6.9 million or $0.13 per share for the quarter, compared to a loss of $0.7 million or $0.01 per share in the third quarter of 2018. Adjusted earnings moved up to $0.12 per share from $0.11 per share last year. Analysts were looking for earnings of $0.11 per share.
Stratasys’ interim CEO Elan Jaglom said, “ Our results in the third quarter reflect a continuation of our track record of delivering earnings and profitability, despite challenging global economic conditions that have impacted customer investments in our target verticals n Europe and Asia.”
Cuts FY19 Outlook
Taking a cue from the challenging market conditions, the management lowered its full-year 2019 revenue guidance to the range of $640 million to $655 million from the previous outlook of $670-$700 million. It is looking for a net loss of $17-$3 million or $ 0.31-$0.05 per share for 2019, on an adjusted basis.
On an adjusted basis, the company expects earnings to be in the range of $30 million to $38 million, or $0.55 per share to $0.70 per share. Adjusted operating margin is expected to be between 5.5% and 6.5%, and capital expenditure between $30 million and $45 million.
Stratasys has been led by interim CEO Jaglom for a long time as the management’s search for a new chief, after the resignation of Ilan Levin more than a year ago, is yet to make any headway. The market will be looking for updates on the matter in the conference call.
Stratasys shares gained 9% since the beginning of 2019, after starting the year on a positive note. The stock closed the last trading session higher but lost sharply early Wednesday.
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