GoPro reported disappointing results for the third quarter, resulting in an all-time low for the company's shares.
For the quarter ended Sept. 30, the revenue of GoPro was reported at $400.3 million. While the figure represents an increase of 43 percent, it is well short of the expected $433.6 million by revenue analysts and the $430 million to $445 million guidance that GoPro set for itself. The company also released weak expectations for the lucrative holiday shopping season of the fourth quarter.
These revelations caused the share prices of GoPro to fall 17 percent in after-hours trading to $24.93, which is 65 percent lower compared to its highest point for the year. This is the lowest ever share price for GoPro, which has been battling the downward trend since August amid concerns of the saturation of the wearable camera market.
"I am proud of our year-to-date accomplishments in which we posted strong financial results and expanded our portfolio of products, however our business in the third quarter was clearly more difficult than anticipated,"said GoPro CEO Nicholas Woodman.
The weaker-than-expected demand for the company's Hero4 Session camera could be considered a factor in the lower revenues for GoPro, with the action camera not claiming its expected success due to its initially high price tag and reduced number of marketing campaigns.
Woodman admitted that GoPro has made mistakes and that the company has taken corrective action with regard to its dismal performance, including the $100 discount placed on the Hero4 Sessions just two months after being launched with a $399.99 price tag. The lowering of the price of the camera caused GoPro to take a $19 million charge.
In addition, GoPro revealed new products over the year, instead of its previously successful pattern of announcing new cameras right before the holiday shopping season rolls around. This strategy led to $633.9 million in revenues for GoPro in the fourth quarter last year, and the company will undoubtedly find it tough to match that revenue in the upcoming fourth quarter with no new products being revealed.
While GoPro's revenue of $400.3 million is still nothing to scoff at, the company's inability to meet expectations could be confirming the fears of analysts that GoPro has already peaked. These fears were amplified when GoPro supplier Ambarella revealed expectations that its revenue would decline year-over-year due to a decline in the company's wearable camera unit.
