GoPro (GPRO) Stock Craters after Announcing Preliminary 4Q Results and Job Cuts

Shares of GoPro Inc. (GPRO) were trading down -3.84 or -26.28 percent to $10.77 per share in Thursday’s premarket after the company announced preliminary results for the fourth quarter and full fiscal 2015 year yesterday afternoon. The company also announced that it would be cutting seven percent of its workforce. GoPro stock closed at $14.61, up +0.01 or +0.07 percent in Wednesday’s regular trading session.

Founded in 2004, San Mateo, California based GoPro Inc. was originally named Woodman Labs Inc. for its founder, Nick Woodman.
The company develops and manufactures lightweight wearable high definition personal cameras generally used in extreme action videos. The cameras can be used in unusual situations and are often mounted on drones, planes, quadracopters, cars and army tanks. The company’s product line includes three fixed lens cameras without viewfinders that are shockproof and waterproof to 180 feet or 60 meters, as well as accessories for wearing the camera while skiing, surfing or other sports. GoPro had its Initial Public Offering for $24 per share on June 25th, 2014.

In a statement released yesterday — which resulted in trading in GoPro’s shares being halted — the company said that it expects fourth quarter revenue of approximately $435 billion and $1.6 billion for the company’s entire 2015 fiscal year. Last October, GoPro forecast revenue for the fourth quarter would be in the range of $500 to $550 million. Analysts expected the company to report $520 million in revenue.

In addition to the revenue miss, GoPro said it would cut 100 jobs or about seven percent of its workforce due to weaker sales. The company had about 1,500 employees at the end of 2015 after hiring approximately 500 people throughout the year.

In the company statement, GoPro said that, “Fourth quarter revenue includes a $21 million reduction for price protection related charges resulting from the HERO4 Session repricing in December. Non-GAAP gross margin for the fourth quarter of 2015, excluding the impact of price protection and a charge of between $30 million and $35 million to cost of revenue for excess purchase order commitments, excess inventory, and obsolete tooling is anticipated to be between 44.5% and 45.5%.”

The company’s products, which have gained popularity with extreme sports and other enthusiasts, have seen a significant sales decline due to competition from smartphones and other wearable devices. GoPro’s new forecast and the fact that the company did not release a new product in the quarter, indicates that revenue declined approximately -31 percent from the same quarter one year ago.

GoPro stock is down significantly in the last twelve months, after yesterday’s market close, the company’s shares have declined about -71 percent. The stock will open today at a new all-time low after having traded as high as $86.97 on October 3rd, 2014. Investors have been disappointed with the company’s performance and sales over the past year, with the disappointment culminating in this morning’s routing.

GoPro is scheduled to announce its fourth quarter and full year 2015 earnings on February 3rd after the market close. The earnings release will be followed by a conference call and live webcast at 2PM PST to discuss GoPro’s financial results.

Other News About GPRO

Nick Woodman No Longer A Billionaire As GoPro Shares Nosedive

After today’s routing in GoPro stock, Woodman is worth $995 million compared to $3.3 billion in September of 2014.

Will A New 360-Degree Camera Save GoPro Inc?

Nick Woodman announced plans to launch a “more casual” spherical action camera.

Other Stocks in the News

JPMorgan caps year with better-than-expected results

Company’s 4Q results were helped by a smaller legal bill and reducing its expenses.

Fiat suspended several times after heavy losses

Stock was halted several times on the Milan Stock Exchange after declining more that -10 percent.

Published on Jan 14, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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