Something’s Working for GoPro, but What Is It?
A colorful quarterly scorecard
GoPro (GPRO) exited the latest quarter with a colorful scorecard. The company reported sales and earnings that both grew from a year ago and topped consensus estimates. It had been a long time since GoPro investors celebrated robust quarterly sales and earnings growth like those reported for 2Q17.
GoPro, which relies on the sales of action cameras for the majority of its revenues, has in recent years struggled with tepid demand for its products and tough competition from camera makers like Sony (SNE) and Canon (CAJ) and high-end smartphone vendors like Apple (AAPL) and Samsung (SSNLF).
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Cost-pruning lifts GoPro’s performance
The gains that GoPro registered in 2Q17 stemmed from the company’s ongoing efficiency drive, which has cut jobs and shut certain operations. This cost-pruning is leading to savings that GoPro is reinvesting in creating new products to bring in new revenues and to strengthen the competitiveness of existing products.
As a result, GoPro has been able to launch new products on schedule and drive strong demand for its products while keeping a lid on expenses.
GoPro’s losses narrow
GoPro’s revenue rose 34% to $296.5 million in 2Q17, topping the consensus estimate of $269.6 million. The company reported EPS (earnings per share) loss of $0.09, which was better than the $0.25 loss that analysts expected the company to report for the quarter.