GoPro stock tumbles after weak camera sales
NEW YORK (AP) — GoPro had a rough holiday season.
The maker of wearable cameras, used by mountain climbers, surfers and other extreme sports fans, said late Wednesday that sales of its devices were weak even as it cut the price of its latest camera in half. The San Mateo, California, company also said it will cut about 100 jobs.
Shares of GoPro plummeted Thursday to their lowest point since it became a public company nearly two years ago.
GoPro launched the Hero4 Session in July at $400, but eventually slashed the price to $199 by December. The price cut reduced its fourth-quarter revenue by $21 million, the company said late Wednesday.
The company said revenue during the three months that ended Dec. 31 was about $435 million, far below the $500 million to $550 million it previously expected. That would mean its revenue dropped 31 percent from the same period a year ago, when it posted revenue of $633.9 million.
Wall Street analysts expected the company to report $521.2 million in revenue during the fourth quarter, according to FactSet.
Despite the weakened demand, it's still too early to know if GoPro's cameras were just a fad, said Raymond James analyst Tavis McCourt. "We will likely know by the end of 2016 after GoPro enters the consumer drone market and rolls out a new lineup of Hero 5 cameras," said McCourt in a note to investors.
The San Mateo, California, company said that it will cut about 7 percent of its workforce, or about 100 jobs. The company has about 1,500 employees. It said paying severance to laid off workers will cost the company between $5 million and $10 million during the first quarter of 2016.
Shares of GoPro Inc. fell $2.35, or 16.2 percent, to $12.26 on morning trading Thursday. GoPro's stock has lost more than half of its value since it made its debut on the stock market in February 2014 at $24 per share.
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