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Earnings Results: GoPro swings to a surprise profit but stock dips as outlook comes up light

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Shares of GoPro Inc. were falling in after-hours trading Thursday after the maker of action cameras topped expectations with its latest results but delivered a second-quarter outlook that fell short of the consensus view.

The company generated first-quarter net income of $6 million, or 4 cents a share, whereas it posted a loss of $10 million, or 7 cents a share, in the year-earlier quarter. Analysts had been expecting a GAAP loss per share of 2 cents.

On an adjusted basis, GoPro
GPRO,
-6.82%

earned 9 cents a share, up from 3 cents a share a year before, while the FactSet consensus was for 6 cents a share.

Revenue increased to $217 million from $204 million a year earlier, whereas analysts had been modeling $217 million.

GoPro generated $89 million in revenue from GoPro.com, including from subscription and services, which kicked in $19 million to the total.

The company last month launched the HERO10 Black Bones, the first of two “derivative” cameras that GoPro plans for this year. This first-person-view camera is a “stripped-down, lightweight variant of HERO10 Black that is designed specifically for mounting on small, agile drones” that Chief Executive Nick Woodman expects will serve an “important core GoPro customer group,” according to prepared remarks that GoPro shared ahead of its earnings call.

“Expect to see more from our derivative and diversification strategy in both hardware and software later this year and expanding further in 2023,” Woodman continued. “We’re confident we can grow our TAM [total addressable market] by serving differentiated, often very specific needs of our consumer and professional customers.”

GoPro expects second-quarter revenue of $235 million to $245 million, as well as adjusted earnings per share of 4 cents to 8 cents. The FactSet consensus was for $272 million in revenue and 15 cents in adjusted EPS.

“Looking ahead to the second quarter and full-year 2022, our expectations are for greater revenue growth in the second half due to the timing of product launches,” Chief Financial Officer Brian McGee said in his prepared remarks.

Shares were off 1.7% in after-hours trading Thursday.

For the full year, GoPro still expects “to drive revenue growth through modest increases in unit sales as well as growth in ASPs [average selling prices],” according to McGee’s comments.

The holiday quarter is typically GoPro’s strongest, with sequential growth in sell-through of 30% to 50% or more. “We expect our derivative and flagship product launches in the second half to result in 4Q’22 sell-through lift toward the higher end of our typical sell-through range as we have more new products available for sale,” McGee said.

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