Camera Maker GoPro Raises Projections Despite Shares-Drop
Camera maker GoPro Inc. lifted its forecast for fiscal 2019 revenue. It is gambling on new product releases streamlined for the latter half of the year, shooting shares up to 5%.
On Thursday, the company said it now anticipates its full-year revenue to tread higher between 9% and 12%. Previously, it forecasted a rise between 7% to 10%.
According to Chief Executive Officer Nicholas Woodman, channel inventory is at “appropriate levels globally” due to sustained demand in “all” regions.
“We believe we are well-positioned for the launch of new products later this year,” she added.
In 2018, GoPro rolled out the HERO 7 series—the HERO 7 White, HERO 7 Silver, and HERO 7 Black—for the holiday season. The line-up bolstered the action camera maker’s sales, allowing it to report its first profit in five quarters.
According to an analyst, GoPro’s “back-half success” is tough to predict. Since the upcoming products are not yet available for reviews, leaving the market with “very limited details.”
GoPro is attempting to make its premium-priced products, ranging from the flagship HERO cameras and spherical Fusion cams, more distinguishable. At the same time, it is also trying to entice action/adventure enthusiasts who have switched to smartphones for their enhanced camera quality.
The stock price of the flagship HERO manufacturer dove 12% during aftermarket trading. GoPro underperformed against revenue estimates for Q2.
Despite the action camera maker’s increase in revenue by 3% to $292 million. Analysts’ expectations were at $302.3 million, according to IBES data from Refinitiv.
Compared to the previous year’s report, the company’s net loss dropped from $37.3 million. Same as 27 cents per share to $11 million, or 8 cents per share.
According to the company, it managed to reduce operating expenses by $5 million in Q2, helping gross margins increase from 29% to 35%.
Improved Consumer-Base of the Camera Maker
In exclusion of items, the action camera maker failed to overcome expectations of 4 cents per share as it ended the quarter at 3 cents per share.
The company emphasized its expectation that most of its U.S.-bound cameras will be manufactured in Mexico for the rest of 2019.
Currently, GoPro is attempting to soften the blow of the increase in tariffs as a result of the Sino-U.S. trade dispute.
So far, the company had shipped 1.08 million camera units, a 1% increase from a year-ago period.
According to NPD Group, the HERO 7 Black is the best-selling camera by volume in the U.S., topping at number one in the leaderboards. Moreover, the HERO 7 camera-line and Fusion were the top-four selling among all action cameras.
The camera maker expects its top line to grow at 7% to 10%, compared to the market estimate of 9.4%.
Expectedly, adjusted earnings data will wade between 25 to 45 cents per share. Compared to analysts’ forecast of 38 cents per share for fiscal 2019.
Previously, GoPro shifted its focus solely onto the action camera business. However, the company rolled out a subscription-based service named GoPro Plus and since then, has been costing users $5 monthly.
As of July 31, subscribers of the app exceeded the 252,000, improving 50% over the previous year. GoPro Plus subscribers surged 15% in Q1 of fiscal 2019.
