ExOne (XONE, Financial) disappointed the Street with its third-quarter results that missed the street expectations on account of delayed shipments. The numbers were down year over year, even as the company struggles to turn around its present situation. Led by its tepid performance the stock tanked to its all-time lows. And now the big question reeling in investors' minds is whether the stock has hit its bottom or is there more. Let’s see in detail where the company is heading and what are its future prospects.
New shipments will drive growth
The management cites that, although revenue was down during the quarter, this loss will be compensated in the fourth quarter as ExOne starts shipping its orders. It reaffirmed that the orders have not reduced; it’s only delayed due to minor issues. The company is optimistic about its outlook in the U.S. market and expects the same momentum to continue in the days ahead.
However, it is skeptical on Euro Zone, which is facing various macroeconomic headwinds. Its main business in this region comes from the auto market. Although the auto segment is doing well in Europe, the companies are cautious about new spending on research. To improve its situation in Europe, the company is combining five individual locations into one, which will increase its efficiency. The management expects that these initiatives should be visible in its results in the next fiscal. Also, the Russian market has also increased its delays, as the company has to get clearances from the government.
Product innovation is important
In Asia as well, it had a bumpy performance with strong presence in China while it received a lukewarm response from Japan. Interestingly Japan was a stalwart part of its machine growth; but after the Japanese government funded a program to compete with the X1 machining process, its customers in this region have backed off. But all is not lost and the management is still optimistic about its future prospects.
In a competitive market such as this, it is essential for ExOne to have a strong product portfolio and a zeal for innovation. In this direction the company is focused to invest in both materials development and machine technology in order to maintain its leading position in the world of 3D Printing. After years of research it has decided to choose those materials, which have either high thermal conductivity or very low.
Conclusion
This is a technique, which allows you to print the 3D object, of which you just took an image on your digital camera few minutes back. This is a ground breaking technology that will give an edge to ExOne in the 3D Printing industry. With such innovations the company seems to be well on track and could do better in the coming months. Although its present performance was not very encouraging but as the company completes its backlogs, backed by its innovative ideas we may see a turnaround in the days ahead.
