GoPro Inc Stock Tanks After Sales Miss Estimates

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GoPro released its latest earnings report after closing bell tonight, posting adjusted earnings of 29 cents per share on $540.6 million in sales. Analysts had been expecting 22 cents per share in non-GAAP earnings and $575.5 million in sales. In the year-ago quarter, the company reported non-GAAP losses of 8 cents per share on $436.6 million in revenue.

The action camera maker guided for earnings to be between 25 cents and 35 cents and revenue to be between $600 million and $650 million for the holiday shopping quarter.

GoPro’s per-share losses widen

GoPro’s per-share GAAP loss widened quite a lot, rising to 82 cents per share from 25 cents per share in the same quarter a year ago. Adjusted EBITDA improved to $4.3 million from -$9.3 million a ear previously.

GoPro had tried to paint a cheery picture of the holiday shopping quarter after Black Friday, as it issued a press release saying that unit sell-through over Black Friday week rose 35% at leading U.S. retailers. It also said that sales on its own website between Thanksgiving and Cyber Monday grew 33% year over years.

The action camera maker also announced this week that the recalled Karma drone is now back on sale. Interestingly, it hasn’t changed the price of the drone, which still costs $800 or $1,100 in a bundle with the HERO5 Black camera. GoPro voluntarily recalled the quadcopter in November after several owners reported that theirs had just dropped out of the sky while they were flying it.

GoPro provides guidance

“In 2016, big investments in hardware, cloud, and mobile yielded a solid foundational experience for our customers,” said GoPro Founder and Chief Executive Nicholas Woodman in a statement. “In 2017, we will build on this foundation for our customers while improving efficiency and managing cost to achieve profitability.”

GoPro expects first quarter sales to be around $200 million, plus or minus $10 million. It looks for a GAAP and non-GAAP gross margin in the low 30% range. For this year, the camera maker expects to keep its GAAP operating expenses under $688 million and its non-GAAP operating expenses under $600 million.

Shares of GoPro tanked in after-hours trades, falling by as much as 10.21% to $9.85.

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