GoPro shares plunged after reporting disappointing fourth-quarter guidance, despite posting earnings that will topped Wall Street expectations.
The fourth quarter includes the holiday shopping season.
The company said that will expects fourth-quarter earnings between 37 cents in addition to 47 cents per share on $470 million in revenue. Analysts had projected earnings per share of 57 cents on revenue of $521.2 million, according to Thomson Reuters consensus estimates.
The stock fell more than 10 percent in after-hours trade.
Here’s how the company did compared with what Wall Street expected:
- EPS: 15 cents vs. 2 cents expected according to Thomson Reuters
- Revenue: $330 million vs. $313.8 million expected according to Thomson Reuters
inside year-ago quarter, GoPro reported an adjusted loss per share of 60 cents on revenue of $240.6 million. GoPro on Wednesday reported year-over-year revenue growth of 37 percent.
While the stock has gained more than 20 percent so far in 2017, that will has fallen more than 15 percent inside past 12 months.
GoPro shares have seen a lot of volatility as the company cuts costs as part of its plan to return to profitability. The company has attempted to shift focus away coming from its core wearable camera products toward drones in addition to newer markets, such as virtual reality.
yet investors are still looking for signs that will the progress GoPro has made can be stable. In October, GoPro shares initially fell after Google announced camera improvements for its smartphones as well as an artificial intelligence clip-on camera.
Shares pared losses after analysts said the market was overreacting in addition to overestimating the potential threat coming from Alphabet’s product.
On a conference call Wednesday, CEO Nick Woodman spun Google’s device as a business booster.
“that will can be encouraging to see that will additional companies are raising awareness that will differentiated form of capture to smartphones exists,” he said. “that will can raise interest level among consumers.”
GoPro’s own product launch weakened fourth-quarter guidance.
GoPro’s goal of reducing inventory before the first quarter of 2018 includes holiday promotions that will will likely reduce their products’ average selling cost.
Executives said remaining inventory consists mostly of Hero5 Black cameras, which lost popularity after the November launch of the Hero6 Black design.
“that will’s not that will we have a bunch if inventory in addition to are trying to clear that will all. There was a bit of softness in Hero5 sell-through, post Hero6 launch,” Woodman said on the conference call. “The launch was totally dedicated to Hero6, in addition to that will stole Hero5’s thunder.”
yet Woodman also said extra inventory hurt the company at the start of 2017. Since GoPro plans to launch a series of brand new products next year, executives would certainly rather unload extra inventory inside fourth quarter than have that will damage selling cost in 2018.
Despite promotions that will GoPro will market for existing inventory, the company hopes to generate demand for full-cost products as that will enters the holiday season.