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GoPro Reports Wider Loss in First Report After IPO

GoPro Inc. (GPRO), in its first earnings release as a public company, reported a wider quarterly loss, helping to send shares down as much as 13 percent.

The net loss was $19.8 million for the second quarter, almost four times bigger than the $5.1 million loss from a year earlier, the company said in a statement yesterday. Excluding some items, it posted a profit of 8 cents a share, compared with analysts’ average projection of 7 cents a share.

Sales rose 38 percent to $244.6 million, topping the average analysts’ estimate of $238.1 million, according to data compiled by Bloomberg.

The San Mateo, California-based company went public in June at $24 and its shares have since soared. Even as consumers keep buying GoPro’s tiny video cameras that adventurers strap onto their bodies to record their exploits, investors are locking in their gains after the company’s strong stock run, said Alex Gauna, an analyst at JMP Securities.

“It looks clean to me,” said Gauna, who rates the stock the equivalent of a buy. “Maybe there’s some profit-taking from people who thought they’d get even more. Plus, there was a huge move ahead of this announcement.”

The shares fell 15 percent to $40.97 at the close in New York. Through yesterday, the stock had almost doubled since its June IPO.

Photographer: Victor J. Blue/Bloomberg

Salesat GoPro Inc. rose 38 percent to $244.6 million in the second quarter, topping the average analysts’ estimate of $238.1 million, according to data compiled by Bloomberg. Close

Salesat GoPro Inc. rose 38 percent to $244.6 million in the second quarter, topping the... Read More

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Photographer: Victor J. Blue/Bloomberg

Salesat GoPro Inc. rose 38 percent to $244.6 million in the second quarter, topping the average analysts’ estimate of $238.1 million, according to data compiled by Bloomberg.

Camera Sales

Sales of GoPro’s wearable cameras and accessories rose 31 percent from a year ago to 854 million, as the company promoted the devices in more distribution outlets and targeted specific markets such as hunters and fishermen. GoPro also experienced strong growth of camera mounts, including a $70 model that can be attached to guns and fishing rods.

GoPro has also been trying to parlay content captured by its cameras into a media strategy to make money from advertising and partnerships. Last month, the company announced a deal with Microsoft Corp. (MSFT) to let owners of the Xbox One game console stream videos from a new GoPro channel.

The amount of content is growing rapidly, with the number of GoPro-related videos uploaded to YouTube more than doubling in the quarter, the company said. Consumers downloaded a mobile application that makes it easier to shoot and store videos more than 1.6 million times in the quarter, founder and Chief Executive Officer Nick Woodman said on a conference call.

The company projected third-quarter sales of $255 million to $265 million, with earnings per share of 6 cents to 8 cents. That topped analysts’ revenue estimate of $251.1 million and was in line with the average profit projection of 6 cents a share, according to data compiled by Bloomberg.

‘Clear Vision’

Woodman said in an interview that he’s not focusing on the post-earnings stock decline.

“The stock will go up, the stock will go down,” he said. “The constant is that we’re really excited about the business and we have a terrific, clear vision for the future.”

GoPro is working on a system to manage content that will make it simple for users to turn hours of footage into one- or two-minute clips that rack up hits on YouTube -- and that can ultimately drive sales via ads or distribution deals, Woodman said. The company could also license features of the software.

He added that GoPro will also seek to strike more deals to get its content on more kinds of devices, and mentioned Apple Inc. (AAPL)’s Apple TV and Roku Inc. as “naturals.”

Woodman also said on the conference call that the company has huge opportunities in Asia, where it has spent little on marketing.

“There’s no indication that GoPro can’t be as successful in Asia as it has been in the rest of the world,” Woodman said on the call. “It’s entirely a matter of focus, and then following up with execution.”

To contact the reporter on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Stephen West

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