GoPro Surges Most in a Month on Optimistic Earnings OutlookBy
Revenue and gross margin estimated at high end of projections
Forecasts third quarter to be profitable on non-GAAP basis
GoPro Inc.’s turnaround plans are starting to pay off.
The stock surged as much as 22 percent Thursday after GoPro said third-quarter revenue and margins would be at the high end of the company’s forecast. The outlook signaled that the maker of wearable action cameras and drones is finally stabilizing after a push to cut expenses and update its product line.
In August, GoPro had projected revenue of as much as $310 million and gross margins as high as 38 percent for the quarter ending in September. The company said Thursday that the third quarter will be profitable excluding some costs, though not when using generally accepted accounting principles.
GoPro’s latest results added to evidence of a rebound from a rough 2016 marked by production delays, the recall of its new drone, and the closing of its media and entertainment unit. Second-quarter revenue climbed 34 percent from a year earlier, beating estimates, while losses narrowed.
"We had challenging times, but now we’re delivering to consumers and investors," Chief Operating Officer CJ Prober said. "It takes time to change perceptions and build confidence."
GoPro has focused on making its camera hardware and software easier to use. The company is betting that its upgraded Hero6 camera and upcoming 360-degree camera will restore sales growth.
The shares were up 12 percent to $10 at 2 p.m. in New York. The stock had gained only about 2 percent this year through Wednesday after losing 52 percent last year and 72 percent in 2015.