Thursday 28 July 2016

Can Go Pro Sustain Upbeat Earnings Report?

Go Pro Incorporated surpassed the expectations of the market analyst on its second quarter report disclosed recently. The manufacturer of action cameras posted a quarterly sales of $220.8 million, higher than the expected $194 million by the Wall Street analysts.



Though the stock beat the market expectations, it was till down by 47 percent compared to its quarterly sales a year ago. It was down by 52 cents per share, lower than the forecasted 58 percent  per share. The company did not release its third quarter forecast, however, experts believed it might lose $26 cents per share for the next quarter.

Meanwhile, Go Pro announced a full year revenue of $1.35 billion to $1.5 billion for the rest of the year. The estimates of the company was contradicted by the market analysts with their $1.34 billion sales prediction this year.

Go Pro Product Refresher

GoPro founder and CEO Nick Woodman sounded optimistic in the trend of the company for the rest of 2016.“GoPro is well-positioned for the second half of the year. We now have a simple product line, a clean retail channel and clear indications of strong consumer demand.” Woodman said.


“In the second quarter, revenue was up 20% sequentially to $221 million. We shipped 759,000 units, an 8% increase quarter-over-quarter, and our average selling price increased 11% sequentially. Second quarter revenue was down 47% year-over-year, largely due to continued channel inventory reductions of nearly 35% sequentially.”

In the middle of the strong competition with Garmin and Sony, Go Pro indicated its intention to become net income profitable on a GAAP and non-GAAP in the last quarter of 2016. Further, the company aims to go away from costly inventory as much as possible before the release of the new line of products in the fourth quarter.



Reports indicated that the company is gearing for its Hero 5 camera family and Karma flying camra drone soon. Go Pro clarified the details of these producr refresh it said “Hero 5 and Karma will contribute to the largest introduction of products in our history, all in time for what we believe will be GoPro's most exciting fourth quarter, ever -- a quarter where we expect to return to profitability.”

Go Pro Stock Performance

Shares  of Go Pro Incorporated advanced 1.21 percent in the ore market session and settled at $11.57, jumping 2.21 percent. Currently, the  American technology company has a market capitalization of 1.59 billion after disclosing the second quarter earnings report.


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