GoPro shares plummet after ugly earnings report
GoPro (GPRO) announced its Q4 2016 results Thursday and it was ugly. The quarter saw the company pull in just $540.6 million in revenue, which was far short of the $573 million analysts were expecting. Earnings per share stood at $0.29, which was higher than estimates of $0.22.
GoPro reported that its full-year revenue fell 22% to $1.2 billion in 2016 from $1.6 billion in 2015.
For Q1 2017, management is expecting sales of $190 to $210 million, which is below expectations for $267 million.
Shares are down over 10% in after-hours trading.
GoPro closed out the previous quarter with a rash of bad news. The company suffered from production issues with its flagship Hero5 camera and Karma drone, and then had to issue a recall for the small number of drones on the market when the company discovered they were falling out of the sky.
The Karma finally went back on sale Wednesday, but wasn’t around for the crucial holiday shopping season.
After the company’s poor Q3, GoPro CEO Nick Woodman announced that he was shuttering the action sports camera maker’s entertainment division, which cost the company 15% of its work force, or 200 full-time jobs.
GoPro is also facing stiff competition from Chinese companyies like DJI in the drone market, which GoPro is relying on as a new revenue stream.
More generally, GoPro may be facing an existential crisis as fewer consumers find the need to upgrade their existing GoPro to a newer model every year.
