GPRO Shares Fall After Issuing Mixed Quarter Guidance

GPRO (GoPro, action camera manufacturer) seems to have fallen on hard times. Despite high expectations concerning earnings for the next quarter, GPRO has little to reassure the investors.

According to the Street, on Friday, after GoPro issued a mixed first quarter guidance and announced that COO Nina Richardson leaves her position, its shares fell 13.2 percent to 47.18.

“GoPro said it expects earnings of 15 cents to 17 cents a share for the first quarter, compared to the 17 cents a share analysts surveyed by Thomson Reuters expect. The company expects revenue of $330 million to $340 million for the first quarter, compared to analysts’ estimates of $324.74 million.”

Current company’s position is rather ambiguous: its fourth quarter results greatly exceed experts’ estimates (earnings of 99 cents per share and revenue of $633.9 million vs. 70 cents and $680.33 million projected by experts), but presently, the prospects look rather dubious.

Probably, the major blow received by GoPro recently was the announcement of patent approval of Apple’s mountable camera, making an inroad into what is traditionally GoPro’s major market. The Inquisitr mentioned that after it happened in the middle of January, GoPro’s shares immediately dropped by more than 12 percent. The fact that in their patent application Apple heavily criticizes GoPro’s HD Hero2 camera, promising to deliver greater quality, doesn’t help either.

“It includes only a single image capture system, which captures images from the front of the camera, making it more susceptible to damage and wind resistance.”

GoPro’s shares were traded 80 and higher at the end of 2014 and were steadily falling since then. This is partly justified by the company’s IPO several months ago, but we can’t exclude the role the investors’ uncertainty plays, especially when it comes to possible competition with a giant like Apple. On the one hand, one tends to believe that Apple is likely to achieve success in any sphere of activity if they get interested in it. On the other hand, mountable cameras have been GoPro’s domain for quite some time, and they have a lot of experience in dealing with them.

In addition to that, the fact that Apple got their patent approved doesn’t guarantee that they are going to start production of their own action cameras anytime soon if at all.

All in all, despite the fact that GPRO’s position feels rather precarious at the moment, one cannot forget their steady growth last year.