GoBlo...Ugly Picture

GPRO misses bad and guides down. Off 17% AH. AMBA off 6.2%


The action-camera company said that revenue rose 43% to $400 million, missing its own guidance of $430 million to $445 million. Adjusted profit per share was 25 cents, short of a projected 29 cents to 32 cents per share

Blamed it on wrong pricing strategy on the “Hero4 Session”.

But despite the big sales gains overall, the lower than expected results seem to confirm what analysts had feared: that GoPro has peaked. Despite reporting a strong second-quarter with $419.9 million in revenue, GoPro shares have dropped 46% in the past three months.

Analysts’ fears were only reinforced when Ambarella, a manufacturer GoPro relies on for components, revealed it expected year-over-year revenue to decline in its wearable camera division. A decline in components equates to a decline in camera sales, or so analysts guessed (correctly, it turned out).

For the current fourth quarter, GoPro is forecasting $500 million to $550 million in sales, a decline of 17% year-over-year.

WSJ says they have an inventory problem. Another dark picture emerged on the company’s balance sheet, where the number of days to turn over inventory hit 122.3 – nearly double from last year’s third quarter.

That means slowing sales aren’t confined to a single camera. And it sets up a difficult holiday. The midpoint of GoPro’s forecast for the fourth quarter represents a 17% sales decline year over year — far worse than the 9% gain analysts had been expecting.