What's In The Offing For Voxeljet (VJET) In Q3 Earnings?

Voxeljet AG (NYSE:VJET) is scheduled to report third-quarter 2017 results on Nov 9.

The company has a dismal earnings surprise history, having missed estimates thrice in the trailing four quarters, for an average negative surprise of 70%. The company reported a negative earnings surprise of 60% in the last reported quarter.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Over the past few quarters, Voxeljet’s strategic and operational initiatives to drive improvement in business have provided a boost to financials. These actions are starting to yield results as the company’s gross profit and gross profit margin increased sequentially in the second-quarter of 2017. We believe that improved operational execution will drive the bottom-line performance for the soon-to-be-reported quarter as well.

Voxeljet’s third-quarter 2017 results are likely to benefit from cost-saving initiatives. Further, the company’s large scale service centers globally, including the recently opened subsidiaries in China and India, are expected to bolstergrowth. Strong demand of 3D printing equipment in the United States and higher demand for products in China also bode well for growth.

This apart, the company’s solid investment in core R&D to maintain its position as a technology leader in 3D printing also bodes well for upcoming quarters.

In terms of geographic market, Germany and the United Statesare expected to continue acting as the company’s strongest revenue churners. To further ramp up sales, the company has been moving its systems team into the new and increased production facility in Germany. Moreover, it ismaking good progress, particularly in the aerospace industry, which is expected to supplement sales growth for the upcoming quarter.

However, the fact remains that, the 3D printing industry has been suffering from a prolonged decline in demand for enterprise 3D printers over the past couple of years. Revenues from the company’s System segment (including sales of 3D printers) declined 33% to €2.5 million in second-quarter 2017 from €3.8 million in the year ago quarter. The waning demand for printers has added to the company’s concerns, which might reflect poorly on the upcoming quarterly results as well.

Moreover, depressed oil prices, which have caused investment deferrals by clients, have affected the company’s oil and gas extraction equipment business in the recent past. Also, some of the company’s key customers are facing supply chain redesign issues which are further delaying investments. Other headwinds, including economic slowdown, inflation, currency fluctuations and commodity prices vagaries, have also marred the performance of most players in the industry. We expect Voxeljet’s third-quarter 2017 results to be adversely affected by these factors.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Voxeljet this time around. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Earnings ESP for the company is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 4 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Voxeljet has a Zacks Rank #3, which increases the predictive power of the ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Ichor Holdings, Ltd. (NASDAQ:ICHR) has an Earnings ESP of +0.53 % and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Energy Industries, Inc. (NASDAQ:AEIS) has an Earnings ESP of +2.11% and a Zacks Rank #2.

Teradyne, Inc. (NYSE:TER) has an Earnings ESP of +3.55% and a Zacks Rank #2.

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