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What to expect from Proto Labs Inc.’s (PRLB) Earnings

Proto Labs Inc. (NYSE: PRLB) recently released earnings for the fourth quarter and full-year 2020. The company’s stocks were down by 1.84% in trading on Friday, reaching a low of $186.85 and ending the day at $199.80. During the trading session, 0.75 million shares changed hands, representing a decline of -51.68% from the average session volume of 493.47K shares. The PRLB stock ended its last session at $197.05.

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COVID-19 impacted Proto Labs as the development of 3D – prototyping declined. The company’s revenue declined 6% year-on-year to $ 105.2 million in the past quarter. Revenues decreased 37 % to $10.6 million on a GAAP basis or $0.36 per share.

During the last quarter of 2020, revenue fell by 5.3 %, to $ 434.4 million. There was a significant drop in sales revenue due to the drop in customers’ numbers – customers of unique products, where the number of customers dropped from around 47,774 to just 40,267 in 2020. Adjusted profit fell 15% from the previous year, up to $2.36.

Because Proto Labs is primarily dependent upon the manufacturing and engineering services sector, the results weren’t unexpected. COVID-19 uncertainty has led to a reduction in the number of new products being developed and launched, the profitability of companies such as Proto Labs. The company’s net cash flow dropped marginally from $ 116.1 million a year earlier – to $ 107 million.

Approximately 221 million dollars in cash and equivalents were on hand. Additionally, complex milling services lost the most revenue (-17%, to $31.8 million) and one of the smallest percentages (-13%, to $ 4.5 million) during the period. Likewise, the more advanced segments, injection molding, and 3D printing have grown by 1.1 % and 2 % to $ 52.1 million, respectively.

According to Proto Labs, declining sales impact short-term revenue, but revenue will continue to increase after the epidemic has ended.

Recently, Proto Lab expanded its business by acquiring the 3D Hub’s platform to order 3D print services. As a result of a shortage of personnel, the demand for prototyping and special engineering services will grow in the future. This is consistent with the high value of PRLB shares.

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