Action camera maker GoPro said during the second-quarter conference call that it is on track to launch the much-awaited Hero 5 camera and Karma drone later this year. The company’s shares surged more than 9% after it reported strong Q2 results. GoPro generated $221 million in revenues during the June quarter, higher than the Wall Street projections of $194.6 million. Its non-GAAP earnings stood at ($0.52) per share versus analysts’ estimate of ($0.58).
GoPro’s inventories are at the lowest level in two years
Goldman Sachs analyst Simona Jankowski said in a research report to investors that the Hero 5 and Karma were big positives for GoPro stock during the second-half of the year. The analyst pointed out that the San Mateo-based company’s inventories have fallen to the lowest level in two years. Moreover, Goldman Sachs believes that GoPro’s localization efforts should boost traction in Germany, Japan, South Korea, France and other markets.
The action camera maker forecasts full-year revenue of $1.35 billion to $1.5 billion, compared to the Wall Street projection of $1.34 billion. The company’s 2H, 2016 revenue forecast reflects a 152% H/H growth rate. By comparison, its 3-year average H/H growth has been 42%. Will GoPro be able to achieve it? Jankowski believes that the implied action camera H/H growth rate is only between 30% and 50% if you take into account the drone revenues and higher 1H sell-through.
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GoPro all set for its most exciting fourth quarter ever
Goldman Sachs estimates drone revenues to be $39 million during the current fiscal year. At mid-point of GoPro’s guidance, the 2H action camera revenues would be only 7% higher than 2H, 2014 when the company launched Hero 4. It can easily be achieved considering GoPro has significantly expanded its international footprint since the launch of Hero 4.
GoPro founder Nick Woodman told investors that Hero 5 and Karma will be the “largest introduction of products in our history.” The company is set for its “most exciting fourth quarter ever,” he added. GoPro’s shares have declined almost 80% in the last 12 months.