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Why Stratasys, Ltd. (SSYS) Earnings Sent Shares Skyward

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Shares of 3-D printing specialist Stratasys, Ltd. (NASDAQ:SSYS) jumped by as much as 13% in Monday’s trading after the company reported its fourth-quarter and full-year 2012 earnings.

So why the optimism?

The numbers
For the year, revenue rose 30% to $359 million with non-GAAP net income of $59.6 million, or $1.49 per share. Non-GAAP gross margins also improved to 58% from 56.5% in 2011.

For the quarter, Stratasys, Ltd. (NASDAQ:SSYS) reported that non-GAAP net income grew 40% from the year-ago period to $0.40 per share, beating analysts’ estimates, which called for earnings of $0.38 per share. Revenue in the fourth quarter also grew 23% year over year to $96.4 million, seemingly crushing analyst estimates for revenue of $52.8 million. However, it’s important to note this report is the first to incorporate revenue from Stratasys’ 2012 merger with industry competitor Object.

On that note, however, according to the income statement in Stratasys’ press release this morning, net sales increased to $71.2 million for the quarter. While we’ve reached out for clarification (since the press release doesn’t explicitly state this number represents pre-merger sales from Stratasys alone), if this is indeed the case it means that Stratasys’ year-over-year sales rose an even more impressive 63%, besting even the 53% revenue growth over 2011 posted by competitor 3D Systems Corporation (NYSE:DDD) just last week. In short, then, Objet’s slower growth actually tempered the combined companies’ results. Now that the merger is complete, however, Stratasys, Ltd. (NASDAQ:SSYS) is also looking forward to leveraging its new combined “global network of more than 260 resellers and independent sales agents that sell Stratasys, Ltd. (NASDAQ:SSYS) products and services worldwide.”

As a result, Stratasys was comfortable providing solid 2013 guidance for revenue and non-GAAP earnings per share of $430 million-$445 million, representing growth from 20% to 24% over 2012. In addition, Stratasys, Ltd. (NASDAQ:SSYS) expects non-GAAP earnings per share between $1.90 and $1.95, or growth over 2012 from 27% to 31%.

Elsewhere in 3-D printing land…
Curiously enough, while newcomer ExOne also found itself trading up nearly 7% Monday — thanks largely to analyst activity including a new buy rating from FBR Capital and an upgrade from BB&T — 3D Systems’ sub-par results from last week seem to have kept a lid on its stock, which is down more than 2% as of this writing. Even so, that doesn’t mean 3D Systems won’t also prove a great investment over the long haul, but rather that its already crazy growth rates of day’s past won’t be quite as absurd going forward.

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