When 3D printing company Proto Labs (NYSE: PRLB) reported earnings last week, showing a near-50% drop in per-share profits from a year ago, I admit that I was a bit confused as to why investors bid the stock up 12% on that news.

On the one hand, yes, Proto Labs beat Wall Street estimates for the quarter. Yes, its earnings were less awful than expected -- but they were still pretty awful.

Management blamed "a challenging economic environment, amplified by rising interest rates and slowing manufacturing activity" for the company's weak sales growth (up barely 1% year over year) and even weaker profits performance. Worse, management said buyers are taking longer to place orders, and are choosing cheaper services over more expensive ones when possible -- indicative of belt-tightening among Proto Labs' customers.

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Source Fool.com