GoPro Inc, Twitter Inc Q4 Earnings Preview

GoPro Inc, Twitter Inc Q4 Earnings Preview

The Q4 results will tell us whether Twitter’s new features can help attract more new users

GoPro and Twitter both are scheduled to release their fiscal fourth-quarter and full-year results on Thursday, February 5 after the market close. Analysts are optimistic about GoPro’s earnings as the action camera maker witnessed strong sales in the holiday quarter. For Twitter, investors want to see significant user growth, which has always been a cause of concern for the microblogging company.

GoPro set to crush the Wall Street estimates

The San Mateo-based company has guided $550 to $580 million in Q4 sales and 65-69 cents in earnings per share. Analysts expect GoPro to report $580.33 million in revenue and 70 cents in EPS. Earlier this week, Wedbush analyst Michael Pachter said in a research note that the higher price Hero4 Black will boost the company’s gross margins.

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Pachter said GoPro benefits immensely from the free viral marketing. He expects Q4 revenue of $600 million with 70 cents in earnings. Wedbush estimates that the action camera maker shipped 1.92 million units in the December quarter, but Pachter says actual figures could be as high as 2.25 million units. For full-year, Wall Street expects the company to generate $1.34 billion in sales and $1.03 in EPS.

Twitter: focus remains on user metric

Analysts polled by Thomson Reuters expect Twitter to report 6 cents in EPS and $453.1 million in revenue. The company had earned 2 cents on revenue of $242.68 million in the corresponding quarter a year ago. Investors have been calling for the ouster of Twitter CEO Dick Costolo. Under pressure, he has rolled out a lot of new features. Many of the new features came in the current quarter, so their impact may not reflect in the Q4 results.

Wedbush analyst Shyam Patil said in a research note earlier this week that though revenue and profitability are important, the investor focus will remain on user growth. Analysts on average expect Twitter to have 295 million monthly active users at the end of December. The San Francisco-based company ended the September quarter with 284 million active users. Even Instagram has surpassed Twitter in terms of user base.

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