The GoPro Inc (NASDAQ:GPRO) 3Q17 earnings report was released after closing bell tonight, and the company posted non-GAAP earnings of 15 cents per share on $329.81 million in revenue. Analysts had been expecting earnings of 2 cents per share on $312.6 million in revenue from the company. In the year-ago quarter, GoPro reported losses of 60 cents per share on $240.6 million in revenue.
GoPro 3Q17 earnings
On a GAAP basis, GoPro 3Q17 earnings came in at 10 cents per share, up from losses of 74 cents per share in last year’s third quarter. Adjusted EBITDA jumped to $35.725 million from -$73.6 million last year. The non-GAAP gross margin was 40.1%, while the GAAP gross margin was 39.6%. The company had guided for a gross margin of 36% to 38%.
Before tonight’s report, Wedbush analysts said they had observed strong demand for the company’s new HERO6 camera, even as demand for its predecessor, the HERO5, also remained strong. She believed that many of those who already owned one of GoPro’s cameras were upgrading to the HERO6 because it offers a nice bump in specs.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
One of the big questions has been whether Google’s Clips camera will bite into GoPro’s sales, although it’s hard to imagine how the two devices are anything alike. They are both wearable cameras, but GoPro’s action cameras are designed to be worn to take video during extreme activities, while Google’s Clips camera only takes “live photos,” which last only a few seconds and aren’t actually videos. Investors don’t seem to understand the difference, as GoPro stock has struggled since Google revealed the Clips camera, and short interest in the stock has risen to a fresh high with extremely high conviction to go along with it.
GoPro’s guidance disappoints
For the fourth quarter, GoPro projects sales of about $470 million, plus or minus $10 million, GAAP earnings of 37 cents to 47 cents per share, and non-GAAP earnings of 37 cents to 47 cents per share. Consensus currently stands at earnings of 57 cents per share on $521.2 million in sales for the fourth quarter.
Following the GoPro 3Q17 earnings release, the company’s stock plunged by about 10%, falling as low as $9.66 per share.