GoPro shares slide on lower Q4 revenues; camera maker may consider sale

Camera-maker GoPro shares slid in US trade Monday, after the firm’s fourth quarter revenue guidance was almost 40% lower than a year earlier. Reports also suggest GoPro’s CEO would be interested in a sale, or tie-up of the business.

GoPro shares ended 12.77% lower at $6.56 on the US Nasdaq index Monday. Although, that represented a recovery from the low of $5.10 it hit shortly after the market open.

Preliminary Q4 earnings disappoint

GoPro announced its preliminary fourth-quarter earnings Monday, which showed revenues for the final three months of 2017 of $340 million, close to 40% lower than in the same period in 2016.

The lower revenue was due to disappointing sales of GoPro’s new HERO range of cameras and also its Karma drone.

"As we noted in our November earnings call, at the start of the holiday quarter we saw soft demand for our HERO5 Black camera," said GoPro founder and CEO Nicholas Woodman. 

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier.  Our December 10 holiday price reduction provided a sharp increase in sell-through,” Woodman added.

Specifically, sales of the HERO5 Black camera more than doubled in the two weeks following the December 10 price reduction. Sales of the HERO5 Session, meanwhile roughly tripled over the same period.

The report detailed that GoPro plans to exit the drone business. Meanwhile, the firm has also announced it will reduce its workforce by around 20%.

Woodman would consider sale

In the wake of the disappointing results, GoPro CEO Woodman told reporters he would consider a sale or tie-up for his struggling camera business.

"If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at," Woodman told reporters on CNBC.

Separately, CNBC and Reuters both reported GoPro has instructed J.P. Morgan Chase to help it secure a potential sale, according to sources familiar with the matter.