Pointing to “better than feared” sell-through, GoPro Inc (NASDAQ:GPRO) is laughing all the way to bank, thanks to the stronger than expected holiday sales. The action-camera maker, which will be reporting its fourth-quarter earnings on Thursday, Feb. 2 says that retailers quickly made a u-turn of their promotions following GoPro’s Karma drone delay. The likes of Karma Grip hand-held stabilizer were some of the GoPro’s products that had a successful sale after it became clear that the drone was not hitting the stores in time for the holidays.
GoPro had its shares soar up with as much as 11% following an increase of quarterly estimates by Pacific Crest. The firm’s analyst Brad Erickson also raised the fiscal fourth –quarter unit estimates from 1.9million to 2.1million. This was more than 10% increase.
Erickson and Elliot Arnson who is also an analyst says, “Checks indicate the fourth quarter turned out better than feared, which could give GoPro a near-term reprieve given high short interest and negative sentiment.”
But one strong quarter does not mean GoPro is in the clear
One strong quarter does not translate to a successful trend of success according to Erickson. After all, the market is so saturated and competition is predominant. On the other hand, GoPro has been struggling with a consistent deceleration in sales as a result of slow demand. A similar holiday last year was worse because of GoPro, which viewed as the top-selling action camera brand was relying on the Hero4 Session, which was launched in July 2015.
The rejection of drone
The launch of Karma drone in September of 2016 was quickly recalled a few weeks after it went on sale in October. Karma, which was retailing at $799 had a mechanical issue which had occasioned the fall of close to 2,500 units from the sky. This was followed by laying off of close to 15% of its staff
But GoPro say that Karma isn’t dead. In fact, plans to relaunch it are underway perhaps later in the year. The company confirms that it is almost finishing the testing before it can get back the flying drone. Meanwhile, GoPro’s stock closed at $10.13 witnessing an increase of $0.73 or 7.77%.