Top Of The Order:
When Bad News Is Good News: Let’s see if we can figure out GoPro, if only just for one day.
Late Wednesday, San Mateo-based GoPro reported yet another bad business quarter. For its second quarter, which ended in June, GoPro turned in a loss of $91.7 million, or 66 cents a share, compared with a profit of $35 million, or 24 cents a share, a year ago. Revenue also went south, falling almost by half, to $220.8 million, from last year’s $420 million. It was the third-straight quarter of losses and declining sales for GoPro. People just aren’t buying the company’s sport-action cameras like they used to. In fact, it’s been more a year since GoPro even released a new camera, the Session, and that was viewed as a failure, especially after GoPro cut the camera’s price in half just to move some units out the door.
Normally, all that would be enough to throw in the towel on GoPro. But when investors and the stock market are concerned normal doesn’t always mean “normal.”
GoPro shares did something Thursday that they hadn’t done often this year: They put in an old-fashioned rally, and surged 12.6 percent. The shares ended the day at $13.02, which is still almost 80 percent less than the $61.87 the stock closed at one year ago. But, maybe, GoPro has hit a bottom and can finally start to go up?
The company’s results, despite the loss, were actually better than expected. Excluding one-time items, GoPro lost 52 cents a share, while Wall Street analysts had forecast a loss of 58 cents a share. GoPro’s sales also beat analysts’ expectations of $194.3 million. The company also said that for the year, it expects sales to be between $1.35 billion and $1.5 billion, which is better than the $1.34 billion consensus forecast from industry analysts.
GoPro is banking its hopes on two new products slated to come out later this year: the Hero5 camera and the company’s first drone, called the Karma. Delays have kept the products from being released sooner, and how the two are received this holiday season may set the tone for GoPro’s future.
Jerry Liu, an analyst with Morgan Stanley, said that after what GoPro has been through in the last year, the company plans to hold to a “good, better, best” camera product line, and emphasize its camera’s capabilities.
But Liu noted that GoPro expects its product margins to decline in the second half of the year from the 42.4 percent it reported in its second quarter, mostly because of the Hero5 and the Karma.
“We are also concerned new products cost more to produce, the categories are more competitive and it is harder to differentiate (from competitors),” Liu said.
And if sales and earnings don’t turn around after with its new gadgets, GoPro may not see too many more days like it did on Thursday.
Amazin’ Amazon: Amazon shares rose 2 percent in after-hours trading as the online retailing giant reported second-quarter profit that rose 831 percent from a year ago. Yes, you read that number right.
Amazon’s earnings climbed to $857 million, or $1.78 a share, on revenue of $30.4 billion. During the year-ago period, Amazon earned $92 million, or 19 cents a share, on $23.19 billion sales. The company said it results were helped by strong performances of its Amazon Web Services cloud-computing business and its Fire TV streaming media players.
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Here’s a look at how some leading Silicon Valley stocks did Thursday…
Movin’ On Up: Gains came from NetSuite, which rose more than 18 percent after Oracle said it would acquire the cloud-computing company for $9.3 billion, as well as FireEye, Shutterfly, NetGear and Varian Medical Systems.
In The Red: Decliners included Infinera, Applied Micro Circuits, SunPower, ShoreTel and YuMe.
The tech-focused Nasdaq Composite Index rose 0.3 percent to 5,154.
The blue chip Dow Jones Industrial Average slipped by 0.1 percent to 18,456.
And the broad-based Standard & Poor’s 500 Index edged up by 0.2 percent to 2,170.
Quote Of The Day: “We never set out to make the most, but we’ve always set out to make the best products that make a difference.” — Apple Chief Executive Tim Cook, as he marked the selling of the 1-billionth Apple iPhone.
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Photo: GoPro’ CEO Nick Woodman at the time of his company’s IPO in 2014. (AP/Seth Wenig)
Tags: amazon, Apple, Earnings, GoPro, Hero, Hero5, iPhone, Karma, revenue