GoPro just set itself up for a make-or-break second half

An icy start to the year for GoPro
An icy start to the year for GoPro
Image: AP Photo/Alex Brandon
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If you could snowboard down the chart of GoPro’s stock price since its IPO in 2014, the ride would be just as extreme as anything people have filmed with its cameras. And things could soon get even more intense.

When announcing its earnings for the first quarter of 2016 today, the action-camera maker essentially set itself up for a make-or-break second half of the year. GoPro CEO Nick Woodman said in a press release that the company will be delaying the release of its first new product since last summer, the Karma drone, until the holiday season. In a call with investors to discuss earnings, he said the next iteration of its main product, the Hero action camera, would come out “later this year.”

With no new products scheduled for the first half of the year, things are not looking great. GoPro sales for the first three months of 2016 were about $183 million, down about 50% from the same quarter last year.

This quarter’s results actually beat expectations from Wall Street, which was aiming to see about $169 million in sales for the quarter, according to The Wall Street Journal (paywall). After being up around 2% in early after-hours trading, the stock began tumbling during the company’s earnings call, falling around 6%, at the time of publishing.

But GoPro has now strung together a few tough quarters, as the company has not shown signs that it will be able to move beyond its original product, the Hero, which is starting to look like a passing fad. At this point, it seems as if everyone who likes to do extreme things and film themselves doing them now has a camera to do that. And, partially because GoPro’s cameras are so rugged, they’re not having to buy new ones.

The company did have a few green shoots in its press release, including a deal it’s signed with the Tour de France, and that it’s still working with the NHL, the PGA golf tour, and the Grammy music awards. But as its earnings seem to be showing, advertising and partnerships meant to get GoPro cameras in front of as many people as possible seem to be having a negative effect on the company’s profits, but not much of an effect on sales.

GoPro does have a few plans up its sleeves, and one areas it’s looking into is virtual reality. Conveniently enough, the company released some footage from its new professional six-camera VR rig, called the Omni, right before earnings were released.

GoPro announced its VR intentions at last year’s Google I/O developer conference, but has yet to actually ship either the Omni, or the sixteen-camera rig it’s working on, called the Odyssey. In today’s release, the company said it plans to ship the Omni in August.

On top of that, analysts and consumers are waiting for the next version of its mainstay product, the rumored Hero5, which the company has also been hinting at. The last camera the company released, a small, stripped-down version of its Hero camera, called the Hero4 Session, has had its price cut multiple times since it was released, leading many to speculate that it was not selling well, and to wonder whether (paywall) GoPro has much to offer in a world where most people carry small, powerful cameras in their pocket already—their smartphones.

GoPro is juggling a lot of new product lines, but there still hasn’t been any indication that it’s going to be able to move beyond its core action-camera business. We’ll likely find out in the second half of this year.