After a standout beat in the last quarter of 2015, 3D Systems Corporation DDD posted a terrible miss in its first quarter of 2016. The company reported an adjusted loss (including share-based compensation expense) of 5 cents per share for the quarter, which was much wider than the Zacks Consensus Estimate of a loss of a penny.Shares climbed over 6% pre-market in anticipation of good results, but after the release, the momentum began to fade, with shares up just 1.3% at the time of writing this report.The company posted a GAAP loss of 16 cents per share, wider than the loss of 12 cents reported in the year-ago quarter. Strained revenue growth dragged the company’s bottom line.Inside the HeadlinesThe 3D printer maker reported revenues of $152.6 million, reflecting a year-over-year decrease of 5.1%. Revenues declined 2% year-over-year excluding the contribution of consumer products and services. A continued challenging operating environment and lower revenues from 3D printing products restricted top-line growth. Sale of printers also contracted 24% year over year, hurting the top line significantly. However, software and healthcare businesses remained strong, lending some support to the revenues.However, revenues beat the Zacks Consensus Estimate of $151 million by a small margin.Gross margin for the first quarter expanded 170 basis points on a year-over-year basis to 50.8%.Also, the company’s operating expenses fell 2% to $94.3 million, resulting in operating margin expansion of 180 basis points to 61.8%.Despite challenging growth conditions, 3D Systems continues to focus on expanding its market share through strategic partnerships. The quarter saw 3D Systems partner with two major healthcare companies to expand its Simbionix training product line for women. The move will strengthen its competitive position in the healthcare market and boost results.The company also upgraded the MultiJet Printing family of 3D printers with the launch of high-throughput ProJet MJP 3600 Series and introduced Geomagic Freeform 2016 software products. These new products are expected to drive the quarterly top-line performance.In addition, the company is committed to channelize its resources toward more profitable markets. 3D Systems recently announced its decision to stop the production of Cube, the entry-level consumer 3D printer. Although it might hurt revenues in the short term, we believe that it will direct the company’s resources toward higher-margin products and thus enhance profitability in the long run.Cash Flow and Balance Sheet3D Systems ended the quarter with cash and cash equivalents of $169.8 million, down from $199.9 million as on Mar 31, 2015. For the first quarter, cash generated from operating activities came in at $18.1 million versus cash used in operating activities of $0.94 million as of Mar 31, 2015.To ConcludeOver the past few quarters, 3D Systems has been experiencing unfavorable broader market conditions that have badly hit its financial performance. The company is grappling with strong volatility in macroeconomic factors such as economic slowdown, inflation, currency fluctuations, commodity prices and credit availability. These conditions continue to impact the company’s performance negatively.However, the company is taking initiatives to channelize its resources into more lucrative areas in professional and industrial markets. 3D Systems also conducted numerous successful product launches and strategic deals, which could help the company to combat these persistent challenges in the near future.Also, 3D Systems’ healthcare business is showing strong performance, driven by rising demand from customers who print medical and dental devices. The company is also focusing on enhancing its existing 3D printers line, reinforcing partnerships and boosting productivity.3D Systems presently carries a Zacks Rank #2 (Buy). Other stocks in the broader sector that are worth a look include Coach, Inc. COH, Pool Corp. POOL and Callaway Golf Co. ELY. All these stocks carry the same rank as 3D Systems.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report POOL CORP (POOL): Free Stock Analysis Report CALLAWAY GOLF (ELY): Free Stock Analysis Report COACH INC (COH): Free Stock Analysis Report 3D SYSTEMS CORP (DDD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research