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Earnings Results: GoPro stock surges after earnings, as company confident in outlook despite supply crunch

GoPro Inc. easily exceeded expectations for its most recent quarter and expressed confidence in its ability to hit its full-year targets, even if the ongoing supply crunch may limit upside.

Shares
GPRO,
-1.33%

were up more than 9% in after-hours trading Thursday.

The company generated net income of $311.8 million, or $1.92 a share, up from $3.3 million, or 2 cents a share, in the year-earlier quarter. On an adjusted basis, GoPro earned 34 cents a share, up from 20 cents a year earlier and ahead of the FactSet consensus, which called for 20 cents a share.

GoPro’s revenue grew to $317 million from $281 million, whereas analysts tracked by FactSet had been projecting $292 million.

For the fourth quarter, GoPro expects $375 million to $385 million in revenue as well as adjusted earnings per share of 32 cents to 38 cents. Analysts were projecting $403 million in revenue and 38 cents in adjusted EPS.

While the company’s fourth-quarter outlook came up shy of expectations, the company’s full-year forecast met or exceeded what analysts were looking for in the whole of 2021. GoPro is calling for $1.145 billion to $1.155 billion in revenue for the full year and 80 to 86 cents in adjusted EPS. Analysts were expecting $1.15 billion and 74 cents in EPS.

“On the supply-chain front, we’re proud of the work our team and partners have done to meet demand,” Chief Financial Officer Brian McGee noted in prepared remarks that the company posted in advance of its earnings call. “To reiterate what we said on our last earnings call, we will have the inventory to support our revenue guide for 2021 with limited upside due to supply-chain constraints.”

McGee also discussed expectations for fourth-quarter gross margins above 40%, ahead of the 38.3% margins seen a year earlier, despite potential impacts from rising freight rates amid the supply-chain crunch.

“We expect freight rates to reduce as holiday traffic levels ease as we get into 2022,” he noted.

Shares of GoPro have slipped about 10% over the past three months as the S&P 500
SPX,
+0.42%

has risen 6%.

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