(Reuters) - GoPro Inc’s revenue increased less than expected in the holiday quarter and its sales growth forecast for the current-quarter also fell short of expectations, hurt by shrinking demand for the company’s body-mounted point-of-view cameras.
GoPro also forecast a steep sequential drop in gross margins for the current quarter, sending the company’s shares tumbling nearly 14 percent in extended trading on Thursday.
The company has been struggling with slowing sales of its helmet- and body-mounted cameras as cheaper rivals emerge and smartphones feature increasingly advanced cameras.
GoPro has also been plagued by missteps: a delay in the launch of the Karma drone, production issues for the Karma and Hero5 camera once they launched in mid-September, and then a recall.
GoPro said on Nov. 8 that it would recall about 2,500 drones due to power issues, and said on Feb. 1 that it had resumed shipments.
The company did not sell the Hero5 on Amazon for most of the quarter – from mid-October to end-November – due to pricing disagreements with the online retailer.
While GoPro’s revenue rose nearly 24 percent to $540.6 million in the holiday quarter, increasing for the first time in five quarters, the growth was short of analysts’ expectations.
Analysts on average were expecting $574.5 million, having lowered their estimate by nearly 14 percent since Nov. 3, when GoPro gave a revenue forecast of $600 million to $650 million for the quarter.
GoPro’s revenue is expected to rise again in the current quarter – to between $190 million and $210 million from $183.5 million a year earlier.
But that is again well below analysts’ average estimate of $267.5 million, according to Thomson Reuters I/B/E/S.
The company said its gross margin in the current quarter would be in the low 30 percent range, a sharp drop from the 39.2 percent recorded in the fourth quarter.
GoPro’s net loss widened to $115.7 million in the fourth quarter from $34.5 million a year earlier. The latest quarter included $102 million for a full valuation allowance on U.S. deferred tax assets and nearly $37 million in restructuring costs.
Excluding items, GoPro earned 29 cents per share, topping analysts’ estimates of 22 cents.
GoPro has set an aim to return to profitability on an adjusted basis next year, and to that end, said in November it would cut about 15 percent of its workforce and shut its entertainment division, which makes original content.
Since then, GoPro’s shares had risen nearly 10 percent up to Thursday’s close.
Reporting by Laharee Chatterjee in Bengaluru; Editing by Savio D'Souza