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.
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.
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