GoPro Inc. swung to a loss in the fourth-quarter and forecast sales within the first quarter that were below analysts’ projections following a disappointing end to 2015 since it’s latest cube-shaped action camera failed to inspire sales at Christmas. The organization also said chief financial officer Jack Lazar is stepping down.
For the current quarter GoPro said it sees revenue of US$160 million to US$180 million. That compares with analysts’ average estimates of US$287.3 million.
The maker of wearable video cameras posted a loss of US8 cents a share, excluding certain costs, within the fourth quarter. Analysts typically were projecting a profit of US1 cent, based on data compiled by Bloomberg. Revenue was US$436.6 million, in contrast to the average estimate of US$434.9 million following the company announced preliminary results Jan. 13, and said hello would eliminate seven per cent of their workforce.
Shares in GoPro fell more than 9 percent to US$9.65 in extended trading around the Nasdaq. The shares rose 4.6 per cent Wednesday to US$10.71 in the close of exchanging New York, prior to the results were released.
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GoPro’s sales took a hit after it had to twice lower the cost on its latest model, the Hero4 Session. When GoPro dropped the cost to US$200 in December in the US$400 introductory price in July, excess inventory had already piled up, hurting margins in the fourth quarter.
GoPro “made some mistakes” with the Hero4 release, said Jeff Brown, a company spokesperson, within an interview recently. The product was introduced too far ahead of the holiday season there was hardly any marketing support, he said.
“At a cost of just US$199, we expect the device to weigh on GoPro’s top-line performance and margin structure with the first half of 2016 a minimum of,” said Michael Pachter, an analyst at Wedbush Securities Inc., inside a note to clients in front of the results.
Shares of San Mateo, Calif.-based GoPro have fallen 80 per cent over the past year because the company struggled to convince investors it may innovate past the flagship Hero camcorders, made famous by stunning footage from adventure athletes to amateur filmmakers. But stockholders are worried about rising competition from smartphones and camera-equipped drones.
GoPro is rolling out its own drone, named Karma, in March and CEO Nick Woodman is trying to enhance the company’s editing software and capabilities and build a media company around all of the video content users post online.
“The bear case is that the market growth has peaked and may be negative for a while. On the other hand, it seems like a good number of people believe that something totally new can reinvigorate consumer interest,” said Robert Stone, an analyst at Cowen & Co., with a market perform rating on GoPro. “They need something to get people excited again.”
On Tuesday GoPro said hello is going to be live-streaming the PGA Waste Management Phoenix Open, using a transmitter that broadcasts the action from the camera. Called HEROCast, we’ve got the technology has been utilized before by ESPN and also the National Hockey League.