Action Cam Juggernaut GoPro Slashes Sales Forecast, Cuts 7 Percent of Workforce

GoPro might have been better off waiting until the weekend to report preliminary financial results for the fourth quarter and full year ended December 31, 2015. Instead, it held off until after trading hours yesterday to reveal an expected revenue miss and anticipated job cuts only to wake up to a plummeting stock price.

Shares of GoPro are taking a beating in early day trading. Initially shares dropped by upwards of 25 percent but have slightly recovered and are now trading at $12.27, down around 16 percent with slight fluctuations in both directions. That's a far cry from the more than $90 per share GoPro was commanding just months after going public with a $24 IPO in June 2014.

GoPro Hero 4

The reason for the more recent decline is that GoPro now expects to tally just $435 million in revenue for the fourth quarter of 2015, and $1.6 billion for the full year. That's around $75 million less than what analysts were expecting. It didn't come as any consolation that GoPro also announced plans to reduce its workforce by 7 percent.

GoPro tried to soften the blow by pointing out a 50 percent bump in annual headcount over the past two years, along with a 16 percent annual growth rate for 2015. But investors chose to focus on the present situation, which GoPro admitted didn't live up to expectations.

"Fourth quarter revenue reflects lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter," GoPro stated.

GoPro has yet to unveil its Hero 5 series of action cameras. It's also planning to launch a line of quadrocopters in the first half of 2016.