GoPro Shares Plunge as Holiday Revenue Forecast Disappoints

(Bloomberg) -- GoPro Inc. shares tumbled the most in almost 10 months after giving an outlook for sales in the holiday period that missed analysts’ estimates.

The camera maker beat Wall Street revenue estimates for the third quarter, but gave a forecast for revenue of as much as $380 million for the current quarter. Analysts had estimated GoPro would reach sales of $393 million on average during the holiday period. Also weighing on the shares, GoPro reported gross margins in the third quarter that fell short of estimates.

GoPro slumped as much as 24 percent on Friday, the biggest intraday drop since January, bringing losses for the year to about 28 percent.

In an interview on Bloomberg TV, Chief Executive Officer Nicholas Woodman said he was confident GoPro would have a "successful holiday quarter." The company’s core business is growing, Woodman said, adding that new types of 360-degree cameras would provide ample growth opportunity to restore profitability in the fourth quarter.

GoPro has struggled as it deals with a maturing market for action cameras and a lack of major new product lines. The company exited the drone market after only months and has struggled to expand its consumer appeal beyond its core user base of extreme sport and outdoor enthusiasts. It has tried to expand software revenue with the Plus service that automatically uploads user footage to the cloud for a monthly fee. GoPro has made rounds of job cuts in recent years to reduce costs. Woodman said there wouldn’t be any more restructurings.

GoPro reported sales of $286 million for the third quarter, down 13 percent from a year earlier. It reported a net loss of $27.1 million, or 19 cents a share.

With ongoing trade tensions between the U.S. and China, GoPro said it has plans ready in case its cameras are included on a tariff list.

"We are prepared to move production of U.S.-bound goods in the first half of next year if we’re forced to do so," Woodman said.

To contact the reporters on this story: Olivia Carville in New York at ocarville1@bloomberg.net;Selina Wang in San Francisco at swang533@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, John Lauerman

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