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GoPro reports deep loss, 40% drop in revenue for third quarter

Published November 3, 2016

SAN MATEO, Calif. (BRAIN) — GoPro Inc. on Thursday reported a worse-than-expected loss for its third quarter and forecasted fourth-quarter revenue below market expectations as production issues hampered availability of the newly launched Karma drone and Hero5 Black premium action camera heading into the important holiday sales period. The company began selling both products in early October.

The company reported a third-quarter net loss of $104 million, or 74 cents a share, compared with a profit of $18.8 million, or 13 cents a share, a year earlier. Third-quarter revenue dropped 40 percent to $240.6 million from $400.3 million in the year-earlier period. Both results fell well below analyst expectations, and they follow three consecutive quarters of net losses and steep revenue declines for the company.

For the current fourth quarter, GoPro is forecasting revenue of $625 million and per-share earnings of 30 cents, also below analyst expectations.

GoPro founder and CEO said the production issues on Hero5 Black and Karma have been resolved, both products launched with lower-than-expected volumes and forced the company to revise its fourth-quarter outlook. 

“As a result of our compromised production ramp, we were unable to fully restock channels which had been cleared of legacy product during the third quarter. And furthermore, we anticipate difficulty catching up to meet forecasted demand during the fourth quarter,” he said during an earnings call after market close Thursday.

In addition to Karma and the Hero5 cameras — “the most connected GoPros ever,” Woodman said — he also touted the recent launches of the GoPro Plus cloud content management product and Quik mobile and desktop editing suite as major improvements to the GoPro user experience.

“We’ve finally made it easy for our customers to capture, edit and share great personal content,” Woodman said.

Looking ahead to 2017, Woodman said he expects “the market’s strong reception of our new products this holiday to set us up for double-digit year-over-year revenue growth. This, combined with plans to lower our 2017 operating expenses … gives us confidence GoPro can return to full-year profitability next year.”

Shares of GoPro closed Thursday down 7 percent at $11.94 before the earnings release. In after-hours trading, the stock dropped an additional 20 percent.

GoPro’s stock is traded on the Nasdaq exchange under the GPRO symbol. Its stock performance is tracked on BRAIN's stock page

 

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