(Reuters) - 3D Systems Corp DDD.N slashed its full-year revenue forecast that fell short of analysts’ expectations as it struggles to capitalize on demand for 3D metal printers due to manufacturing constraints.
3D Systems, whose shares fell as much as 16.6 percent, has been investing heavily in increasing capacity at metal printer maker Phenix Systems, which it acquired in July last year.
“We are disappointed that we failed to fully capitalize on the robust demand for our direct metal and consumer products during the quarter,” Chief Executive Abraham Reichental said in a statement.
The company said sales of its design, manufacturing and healthcare products could not compensate for the revenue loss from manufacturing constraints for its metal printers as well as a delay in availability of its consumer products.
“...the concern at this point is whether there is underlying execution problem that could drive further disappointment in the upcoming quarters,” Pacific Crest analyst Weston Twigg told Reuters.
The company’s attempts to increase its manufacturing capacity have weighed on its gross margins.
“We view this as a temporary speedbump and one that was more related to short-term execution than any fundamental structural issue in the business,” Reichental said on a conference call.
The company cut its full-year revenue forecast to $650 million-$690 million from $700 million-$740 million.
Analysts on average were expecting $707.5 million, according to Thomson Reuters I/B/E/S.
3D Systems said it expected to report adjusted earnings of 16 cents-19 cents per share for the quarter ended September. It estimated revenue of $164 million to $169 million.
Analysts on average were expecting earnings of 21 cents per share on revenue of $186 million.
In contrast, rival Stratasys Ltd SSYS.O raised its profit and revenue forecast for the year in August.
3D Systems said in April it expected to get most of the revenue and profit it forecast for 2014 in the second half.
The company has been the target of short-seller Citron Research, which accused the company of exaggerating advances in the technology and contributing to a bubble in shares of companies in the sector.
The company’s shares were down 13.7 percent at $37.42 in afternoon trading on Wednesday. Up to Tuesday’s close, the stock had more than halved this year.
Additional reporting by Supantha Mukherjee and Anya George Tharakan in Bangalore; Editing by Sriraj Kalluvila and Don Sebastian