GoPro Inc. has announced on Wednesday for cutting 7% of its workforce after the fourth quarter (Q4) sales fallen far short than expectations. The wearable camera maker has sold fewer action cameras than expected during the holiday quarter.
The camera maker has posted total revenue of $435 million during the Q4, according to the preliminary financial report. Earlier it has forecast for revenue earning to remain somewhere in between $500 to $550 million in October. However analysts have predicted GoPro to report $521.2 million in revenue, reports The Washington Post quoting FactSet.
As an aftermath of the Q4 preliminary findings, the company has lowered the price of its new Hero4 Session camera. Much expensive price of the product is believed to reduce company's Q4 revenue by $21 million. Following the weak financial outcomes, its shares have plunged 28% in extended trading, reports The New York Times.
The San Mateo, California based company has reported a workforce of around 1,500 employees at the end of 2015 including 500 hired people. It is cutting 7 percent of its jobs or around 100 positions. The job cutting aims to "better align resources to key growth initiatives".
GoPro expects to save between $5 million and $10 million through restructuring expenses during the first quarter of 2016. However, the market will get GoPro's (GPRO) Q4 and full 2015 report on February 3. This time, on Wednesday it has released some off beating preliminary financial results only.
Analysts have also been predicting a drop in sales compared to past year due to not launching any new product during the fourth quarter. Traders have also been assuming a revenue miss but not of this magnitude.
GoPro findings are reportedly being built on imagination. This conforms to the investment thesis outcomes revealed by Trip Chowdhry, a GoPro bear and an analyst with Global Equities Research, according to a report published in Financialcv.
As per the announced Q4 preliminary report, GoPro sales revenue has dropped about 31% compared to the same quarter in 2014. Eventually, GoPro shares have been sold at $14.61 on Wednesday in the Wall Street Market.
The share price is 71% down from that existed a year back. The stock has skidded 22% to $11.40 in extended aftermarket trading. However, GoPro Inc has witnessed initial public offering price at $24 per share in June 2014.
GoPro has annonced on Wednesday that it is going to cut 7% of total workforce. The action camera makera has prompted for job cutting following revelation of poor preliminary financial reports for Q4. Analysts and traders believe, the company's sales revenue has witnessed a fall compared to predictions, but not in such magnitude, it is trying to represent.
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