(Bloomberg) -- GoPro Inc. posted sales that exceeded analyst estimates, suggesting the struggling hardware company is still attracting consumers despite growing competition from cheaper alternatives. Shares jumped as much as 11 percent in extended trading.
Revenue decreased 7.4 percent to $202.3 million in the first quarter, beating analysts’ projections of $182.2 million, the San Mateo, California-based company said Thursday in a statement. The company narrowed its net loss to $76.3 million, or 55 cents a share, in the period. Excluding certain items, the loss was 34 cents, compared with analyst estimates of 36 cents.
GoPro’s shares have plunged about 34 percent this year, suggesting investors are less than impressed with the company’s efforts to revive the business. It has cut prices on popular cameras and rolled out a new, cheaper device to entice new consumers. GoPro has also introduced the Fusion, a 360-degree high-end, spherical recording camera. Demand for its once-novel products have slumped amid competition from cheaper alternatives and improving smartphone cameras. Efforts to gain new sales from a drone device failed, and the company shut down the unit earlier this year.
“We have lingering concerns whether GoPro’s pace of innovation will be able to offset creeping market saturation,” analysts at Wedbush Securities Inc. wrote in a note to investors before the earnings were released.
GoPro hired investment bank JPMorgan Chase & Co. to advise on a potential sale, according people familiar with the matter, Bloomberg News reported in January. Once valued at more than $10 billion, GoPro’s market capitalization has fallen to about $730 million. Chief Executive Officer Nick Woodman said in January that the company would consider an opportunity “to partner up with a larger organization that would help us scale.” In March, GoPro signed a multiyear agreement with its manufacturer, Jabil Inc., for designs and intellectual property to be used to make camera lenses and sensors for other companies’ products.
The shares rose to a high of $5.49 in extended trading after the results were released. The stock had closed at $4.96 in New York.
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