Send me real-time posts from this site at my email
Motley Fool

Proto Labs to Kick Off 3D Printing Earnings Season: What to Watch

Proto Labs (NYSE: PRLB), a quick-turn, internet-enabled contract manufacturer, is slated to report its third-quarter results before the market open on Thursday. Its earnings conference call will begin at 8:30 a.m. EDT that day.

As it traditionally does, the company (which offers both traditional manufacturing and 3D printing services) will kick off earnings season for the 3D printing space. The two largest pure-play 3D printing companies, 3D Systems and Stratasys, are scheduled to release their results on Nov. 5 and Nov. 12, respectively. (Here are earnings previews for 3D Systems and Stratasys.)

Investors' expectations for Proto Labs will likely be modest. Its results for the first and second quarters were hurt by the COVID-19 pandemic, when many of its industrial sector customers were temporarily closed or not operating at full capacity. However, year to date through Friday, Proto Labs stock was up 35.2%, compared with the S&P 500's 8.9% gain.

Image source: Proto Labs.

Key numbers

Metric

Q3 2019 Result

Q3 2020 Consensus Estimate

Projected Change

Revenue

$117.5 million

$104.9 million

(11%)

Adjusted earnings per share (EPS)

$0.76

$0.53

(30%)

Data sources: Proto Labs and Yahoo! Finance.

Management guided for third-quarter revenue between $98 million and $110 million. This range is quite wide due to the "ongoing uncertainty related to COVID-19," CFO John Way said on last quarter's earnings call.

For context, in the second quarter, Proto Labs' revenue fell 8.1% year over year to $106.6 million. The company's Americas business, which accounted for 81% of its total revenue, held up quite well, with revenue declining just 4.7% year over year. Adjusted EPS landed at $0.59, down 17% year over year. Those results easily beat Wall Street's consensus estimates for adjusted EPS of $0.36 on revenue of $100.5 million.

While the pandemic has presented challenges, it also has provided companies with opportunities, as CEO Vicki Holt discussed on last quarter's earnings call:

A crisis like the COVID-19 pandemic provides an opportunity for Proto Labs to demonstrate the value our digital business model can provide. Our purpose is to accelerate innovation from development through commercialization and we've been able to deliver on that purpose during this crisis. [...] To date, we've manufactured and shipped over 8 million parts to be incorporated into products responding to COVID-19 at many different medical-related customers, resulting in $12 million of revenue recognized in the second quarter.

Fourth-quarter guidance

The stock market is a forward-looking machine, so its reaction to Proto Labs' earnings release will probably hinge more on the company's Q4 guidance than its Q3 results, and how it compares to Wall Street's expectations.

For Q4, analysts are modeling for adjusted EPS of $0.50 on revenue of $107.6 million, representing year-over-year declines of 21% and 4%, respectively.

10 stocks we like better than Proto Labs
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Proto Labs wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of October 20, 2020

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Proto Labs. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue