What to watch for in GoPro earnings

The high-definition camera maker gives its first earnings report as a public company Thursday afternoon.

By MSN Money Partner Jul 31, 2014 12:24PM
Credit: © Jeffrey Blackler/Alamy
Caption: GoPro Hero 3 & wearable camera on headbandBy Angela Johnson, MarketWatch

High-definition camera maker GoPro (GPRO) is scheduled to report second-quarter earnings after the bell on Thursday, its first such report since it went public in June.


This is what investors can expect:


Earnings: GoPro is expected to report second-quarter earnings of 7 cents per share, according to analysts surveyed by FactSet.


Revenue: Revenue is expected to come in at $238 million.


GoPro had first-quarter revenue of $235.7 million, according to a June 26 filing with the Securities and Exchange Commission. Revenue for all of 2013 came to $986 million, the filing showed. Net income for the first quarter came to 11.0 million, after $60.6 million for all of 2013.


Share price: The stock is up 87 percent since its initial public offering June 25 at $24 a share. The shares rose 31 percent on their first day of trading on the Nasdaq Stock exchange to touch a high of $49.90 before falling back in subsequent sessions.


Challenges: A declining camcorder market, lack of available products, increasingly sophisticated camera phones, competition and potential injuries could all cause headwinds for the company, according to a note by analysts at J.P. Morgan.


“There is the possibility GoPro could indirectly encourage at times reckless behavior or consumers may be injured while self-capturing activities with GoPro products. There could be a product backlash and the company’s brand and growth may suffer as a result,” they wrote in a note.


Analysts have taken an increasingly cautious tone on the company, questioning its ability to capture the mainstream and social media market while providing a seamless consumer experience. GoPro currently has one camera model, the Hero3, which ranges in price from $199-$399.


J.P. Morgan rates the stock at overweight, but cautioned at uncertainty regarding eventual market size, growth, competition and execution.


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