GoPro Posts Loss, Outlook Weak; Stock Down 10%

(RTTNews) - Action-sports camera maker GoPro Inc. (GPRO), Wednesday reported a surprise loss for the fourth quarter, as revenues plunged 31 percent and margins dropped sharply as demand for its wearable cameras waned. Both earnings and revenues for the quarter fell short of Wall Street estimates. Shares of the company slipped 10 percent in the after-hours trading, following the news.

San Mateo, California-based GoPro reported fourth-quarter loss of $34.5 million or $0.25 per share compared to a profit of $122.3 million or $0.83 per share last year.

Adjusted loss was $11.4 million or $0.08 per share compared to profit of $144.9 million or $0.99 per share last year. On average, 17 analysts polled by Thomson Reuters expected the company to report break even per share for the quarter. Analysts' estimates typically exclude special items.

GoPro's revenues for the quarter plunged 31.1 percent to $436.6 million from $633.9 million a year ago. Analysts had a consensus revenue estimate of $496.1 million for the quarter.

GoPro Founder and CEO, Nicholas Woodman said, "Growth slowed in the second half of the year and we recognize the need to develop software solutions that make it easier for our customers to offload, access and edit their GoPro content."

In the fourth quarter, GoPro's revenues were hurt by weak sales of Hero 4 Session, its latest wearable camera that was launched in July. The company had to lower its price by half to $199 from its initial rate of $400 due to lack of demand.

The company said fourth-quarter revenues includes a $21 million reduction for price protection related charges resulting from the HERO4 Session repricing in December.

Gross margin for the three-month period dropped to 29.4 percent from 47.9 percent last year.

GoPro, founded by surfer-turned entrepreneur Nicholas Woodman, makes small high-definition video cameras that can be mounted on adventurers, like sky divers, cyclists and skiers, to record their extreme action and skills.

Looking forward to the first quarter, GoPro expects revenues of $160 million to $180 million. Analysts currently forecast revenues of $298.0 million. For the full year, the company expects revenues of $1.35 billion to $1.5 billion. Analysts currently estimate revenues of $1.62 billion.

Further, the company said Brian McGee will succeed Jack Lazar as its Chief Financial Officer, effective March 11. Lazar is retiring after two years at the company.

GPRO closed Tuesday's trading at $10.71, up $0.47 or 4.59%, on the Nasdaq. The stock, however, dropped $1.15 or 10.74% in the after-hours trade.