The struggling consumer technology company GoPro reported better than expected sales and earnings for the first quarter, with the numbers beating analyst expectations. The stock remained almost flat at the end of the regular trading session and jumped as much as 6% just after the earnings release while sliding down on the early gains later and was flattish again at 5 PM ET.
Though revenue dipped 7% year-over-year to $202 million, unit growth of 3% was a bright spot. Net loss narrowed to $76.34 million or $0.55 per share from the year earlier loss of $111.2 million or $0.78 per share. The company largely cut on its expenses in the quarter. Adjusted operating expenses reduced by $37 million or 28% from a year ago, which helped in narrowing the loss. The success of the company’s latest low-cost sports camera also aided in narrowing the loss.
The company’s CEO gave a ray of hope to the company’s investors by saying that he expects to see the sale of HERO, GoPro’s core product, to increase going forward. “Initial demand for HERO is promising and we expect it to improve as large retail partners like Target and Walmart begin selling the product in the second quarter,” said CEO Nicholas Woodman. HERO’s positive demand outlook could help pick up the momentum in the company’s stock in the short run.
Overall unit sales increased 3% for the quarter, while revenue declined in all three geographical regions (Americas, Europe and, Asia Pacific) by 5%, 8%, and 10% respectively.
Just about less than a month ago there were rumors going around that the Chinese smartphone maker Xiaomi is ready to buy the camera maker for $1 billion in a bid to gain access to the US markets. However, the trade war concerns between the US and China seems to have swallowed the deal not bringing it to fruition any further.