GoPro, which recently launched a new camera and its first drone, booked a terrible third quarter as the company continues to struggle.

The company has traditionally performed its best in the fourth quarter, as the holiday shopping season kicks in and its products are purchased as gifts. GoPro will need a massively successful holiday quarter this year though, if it wants to post any semblance of recovery from what has so far been a horrible year.

GoPro Third Quarter Earnings

According to its earnings report for the quarter, the company's revenue plunged by 40 percent to $240.6 million, compared with $400.3 million in the same quarter last year. The figure badly missed analyst estimates of $316 million for GoPro's sales.

GoPro also posted an adjusted loss of 60 cents per share, which is also far below Wall Street analyst estimates of an adjusted loss of 36 cents per share.

For the fourth quarter, GoPro said that it is expecting revenue of between $600 million and $650 million, leading to adjusted earnings per share of 25 cents to 35 cents.

Trading of the company's stocks were halted right before the release of the earnings report. When the trading of GoPro's shares started again, prices were already down by 22 percent. This meant that the market capitalization of the company dropped to $972 million from $1.23 billion, with about $250 million in the value held by the company vanishing in just minutes.

In a conference call with investors, GoPro CEO Nick Woodman said that the poor sales that the company recorded in the third quarter is partly due to the production problems that it experienced for its new products, namely the Hero5 camera and the Karma drone.

The Hero5 Black, the Hero5 Session and the Karma all went on sale last month, which prevented the new products from contributing to GoPro's revenue in the third quarter. The company is hoping that the devices will propel GoPro into a profitable fourth quarter, though by doing so, it exposes itself to the risk of suffering from supply chain issues as demand goes up in the holiday shopping season.

Optimism For GoPro

GoPro believes that its struggles will come to a close soon though, with Woodman stating that the company expects to return to profitability next year.

"These are the best products we've ever made and consumer demand is strong," Woodman said about the Hero5 and the Karma. Whether the new camera and drone will push GoPro back to profit, however, remains to be seen.

Reviews on the Hero5 Session and Hero5 Black have so far been mixed, partly due to the high expectations for the cameras as it took GoPro two years to release them. Meanwhile, customers can purchase the Karma in a bundle with the Hero5 Session for $999, with the drone coming with a Passenger app that allows people to take a virtual ride.

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