NEW YORK, U.S. - Wearable camera maker GoPro struggled to keep up the expectations as it announced a horrific third quarter result. The company’s sales dropped to $240.5 million ...
• GoPro share price plummeted by 7 percent
• GoPro to bank on holiday season with Hero 5 and Karma drone
• GoPro expects $625 million fourth quarter revenue
NEW YORK, U.S. - Wearable camera maker GoPro struggled to keep up the expectations as it announced a horrific third quarter result.
The company’s sales dropped to $240.5 million from $400 million in 2015.
Following its 40 percent fall, company’s stock price fell to $11.94 per share at the end of the day’s trade.
GoPro witnessed an influx in share price after announcing its new products – five new cameras and Karma drone in September.
Share price reached to $17.15 per share. The company reported a net loss of $104.1 million for the quarter compared to a profit of $18.8 million a year earlier.
GoPro CEO, Nicholas Woodman attributed the poor third quarter result to a production issue related to Hero 5 and Karma drone that affected their retail availability.
He said, “Unfortunately we experienced production issues that resulted in lower than expected launch volumes for Hero 5 Black and Karma. We anticipate difficultly catching up to meet forecasted demand during the fourth quarter.”
“We’ve now deployed what, in some cases; you could argue is the full GoPro 1.0 vision for the first time. 2017 will be more of an evolutionary year for us versus a revolutionary year,” Woodman added.
Jerry Liu, an analyst at Morgan Stanley said, “Most consumers do not see the need to have a dedicated video/photo capturing device, and stick to their smartphones. While the Hero 5 is an improvement over its predecessors and Karma is a good first-generation product for the drone market, feedback has been at best mixed.”
Following the poor show, GoPro would desperately bank on its new products in the holiday season.
But to make matters worse, it faces intense competition from the new entrant Snap Inc. Its camera glasses are promising a seamless process from capturing to posting.
In addition, its Karma drone too faces fierce competition from Chinese manufacturers such as SZ DJI Technology and other manufacturers who are coming in with cheaper products.
GoPro’s Karma has already experienced early setbacks, pushing the shipping dates to November in addition to a mixed review of the product.
However, the company, which went public in 2013, estimates fourth quarter revenue to be $625 million. Its estimations are below realistic figures of $400 million which is the best the company could achieve so far.