GoPro Mixed Earnings Might Be Enough for Investors

GoPro, Inc. (NASDAQ: GPRO) reported first quarter financial results after the markets closed on Thursday. The company had a net loss of $0.63 per share on $183.5 million in revenue compared to consensus estimates from Thomson Reuters that called for a net loss of $0.60 per share on $169.08 million in revenue. The same period from the previous year had $0.24 in earnings per share (EPS) on $363.11 million in revenue.

First-quarter gross margin was impacted by charges of roughly $8 million related to legacy products for excess purchase commitments, inventory write-downs and marketing development funds. These charges were due to lower sales estimates for end-of-life HERO products. At this point, GoPro has no further financial exposure remaining from purchase commitments and inventory related to its end-of-life HERO camera line. Excluding the charge, the gross margin would have been 36.8%, as opposed to 32.5%.

The company is maintaining the full-year guidance that it issued in February. GoPro expects to have revenues in the range of $1.35 billion to $1.50 billion, compared to the consensus estimate of $1.37 billion in revenue.

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On the books, cash, cash equivalents, and marketable securities totaled $388.7 million at the end of the quarter compared to $474.1 million at the end of 2015.

Nicholas Woodman, GoPro Founder and CEO, commented:

Consumer demand for GoPro remains solid. Unit sell-thru was close to first quarter 2015 levels, a quarter which benefited from the launch of HERO4. Revenue exceeded our guide and, importantly, unit sell-thru rates were approximately 50% higher than sell-in which drove global inventory levels down. And while we had to make the difficult decision to delay our drone, Karma, the upside is that Karma’s launch should now benefit from the holidays.

Shares of GoPro closed Wednesday up 6.1% at $10.71, with a consensus analyst price target of $11.50 and a 52-week trading range of $9.01 to $65.49. Following the release of the earnings report, the stock was up 2.6% at $ in the after-hours trading session.