GoPro Reports Loss, Predicts Declining Sales

GoPro Inc. swung to a surprise loss in its fourth quarter and gave disappointing revenue forecasts for its new fiscal year, fresh signs of trouble for the company as it struggles with weak sales of its latest wearable camera.

GoPro has been pummeled recently by concerns that the market for action cameras has peaked and questions over its ability to diversify into other revenue streams, such as consumer drones.

In the holiday quarter, GoPro also was hurt by disappointing sales of its latest wearable camera: the Hero 4 Session, an ice-cubed sized camera it launched in July. The camera didn't sell well, and by December two rounds of price cuts had reduced its retail price to $199, half the initial $400 price.

"Growth slowed in the second half of the year, and we recognize the need to develop software solutions that make it easier for our customers to offload, access and edit their GoPro content," Chief Executive Nicholas Woodman said in a news release.

GoPro had said in January that it would book special charges in the fourth quarter related to the price cuts for Hero 4 and excess inventory and parts. But the size of the charges were about $20 million higher than its initial projections after GoPro decided to simplify its Hero 4 product offerings.

Those charges helped drive GoPro to a loss of $34.5 million, or 25 cents a share, from a year-ago profit of $122.3 million, or 83 cents a share. Excluding special items, the company's adjusted per-share loss was eight cents a share. Analysts had expected flat adjusted earnings.

Revenue fell 31% to $436.6 million. GoPro in January had forecast revenue of $435 million, well below its October guidance for revenue of $500 million to $550 million.

For the current quarter, GoPro forecast revenue of $160 million to $180 million. Analysts had forecast revenue of $298 million. It expects full-year revenue of $1.35 billion to $1.5 billion, below the $1.61 billion analysts had forecast.

Shares were halted in after-hours trading after rising 4.6% to $10.71 in regular trading Wednesday.

Mr. Woodman started GoPro in 2004 so he and other surfers could photograph their most outrageous stunts. He assembled a prototype with hot glue and plastic, using rubber bands and a Velcro surfboard leash to attach it to his wrist. Mr. Woodman landed his first big retailer, Best Buy Co., six years later.

Amid the concerns over a slowing market for wearables, the company plans to release a consumer drone later this year, and last year it began licensing content shot on its cameras to media companies—an early step toward nascent plans to become a media company. But neither of those pursuits has yet generated meaningful revenue.

GoPro also faces mounting competition from overseas manufacturers and improving smartphone camera technology. Last month, the company said it would cut about 7% of its workforce and reduced its revenue forecast for the fourth quarter.

Write to Chelsey Dulaney at [e-mail]

(END) Dow Jones Newswires

February 03, 2016 17:15 ET (22:15 GMT)

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