The stock of three-dimensional modeling firm Stratasys Inc. plummeted 26 percent Wednesday as investors apparently soured on its lackluster sales relationship with Hewlett-Packard Co.

The Eden Prairie company's stock suffered the day's biggest decline on the Nasdaq Stock Market, closing at $28.11, down $9.86. The drop followed the release of Stratasys' second-quarter earnings.

The second-quarter report looked like anything but the catalyst for a major stock decline. Earnings were up 74 percent to $4 million, and revenue jumped 25 percent to $37.6 million. Adjusted earnings per share were 23 cents, 1 cent above analysts' expectations, while revenue was 4 percent below expectations.

But Steve Dyer, an analyst with Craig-Hallum Capital Group in Minneapolis, said the report disappointed investors who had been waiting 18 months to hear that HP had finally launched a worldwide sales campaign for a Stratasys printer that makes three-dimensional plastic models of product prototypes.

"Over the last year and half there have been high expectations for the HP relationship priced into the stock," Dyer said. "There's now a lot of uncertainty around the timing of an HP worldwide rollout, or whether it will happen at all."

In the earnings report, CEO Scott Crump said Stratasys continued "to make incremental progress in expanding our agreement with HP for the sale and distribution of our proprietary 3D printers," adding that the agreement had been renewed for another year and that HP planned to expand European-only marketing.

However, Crump said, "The full potential and ultimate success of our collaboration with HP will require sales and marketing programs that go beyond current commitments."

After the Stratasys-HP agreement was announced in January 2010, the stock rose from $18.63 then to a two-year high of $55.43 in April of this year. After first-quarter earnings contained little evidence of progress in HP's European marketing of the Stratasys printer, the stock dropped to $30.21 in June before rising to $39.34 last week.

Steve Alexander • 612-673-4553