GoPro, Inc. (GPRO) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $104.07 million, or $ 0.74 a share in the quarter, against a net profit of $18.80 million, or $0.13 a share in the last year period. On adjusted basis, net loss for the quarter stood at $84.28 million, or $0.60 a share compared with a net profit of $36.63 million, or $0.25 a share in the last year period.
Revenue during the quarter plunged 39.91 percent to $240.57 million from $400.34 million in the previous year period. Gross margin for the quarter contracted 627 basis points over the previous year period to 40.35 percent. Operating margin for the quarter stood at negative 48.05 percent as compared to a positive 6.90 percent for the previous year period.
Operating loss for the quarter was $115.59 million, compared with an operating income of $27.64 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $88.55 million compared to operating profit of $47.47 million in prior year period.
"These are the best products we’ve ever made and consumer demand is strong. GoPro is now a seamless storytelling experience and we’re very happy with customer reception so far,” said Nicholas Woodman, GoPro’s founder and chief executive officer. "Looking forward to 2017, we expect to return to profitability, driven by the strength of our new products, double digit revenue growth and annual operating expenses of approximately $650 million.”
GoPro expects revenue to be in the range of $1,250 million to $1,300 million for financial year 2016. The company projects diluted earnings per share to be in the range of $0.10 to $0.20 for the fourth-quarter. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.25 to $0.35 for the fourth-quarter.
Operating cash flow turns negative
GoPro, Inc has spent $120.45 million cash to meet operating activities during the nine month period as against cash inflow of $136.76 million in the last year period.
The company has spent $30.85 million cash to meet investing activities during the nine month period as against cash outgo of $230.43 million in the last year period.
Cash flow from financing activities was $3.48 million for the nine month period, down 93.73 percent or $51.98 million, when compared with the last year period.
Cash and cash equivalents stood at $131.58 million as on Sep. 30, 2016, down 53 percent or $148.39 million from $279.97 million on Sep. 30, 2015.
Working capital drops significantly
GoPro, Inc has witnessed a decline in the working capital over the last year. It stood at $148.87 million as at Sep. 30, 2016, down 77.36 percent or $508.65 million from $657.52 million on Sep. 30, 2015. Current ratio was at 1.42 as on Sep. 30, 2016, down from 2.90 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 14 days for the quarter from 69 days for the last year period. Days sales outstanding went up to 40 days for the quarter compared with 27 days for the same period last year.
Days inventory outstanding has decreased to 47 days for the quarter compared with 110 days for the previous year period. At the same time, days payable outstanding went up to 101 days for the quarter from 68 for the same period last year.
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