Upcoming AWS Coverage on Ballantyne Strong Post-Earnings Results
LONDON, UK / ACCESSWIRE / December 1, 2016 / Active Wall St. blog coverage looks at the headline from GoPro, Inc. (NASDAQ: GPRO) as the company announced on November 30, 2016 announced that the company will be undertaking restructuring of its corporate structure with an aim to reduce expenses and increase profitability. It aims to reduce its operating expenses by $650 million for the year 2017 and focus on its core business. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of GoPro's competitors within the Photographic Equipment & Supplies space, Ballantyne Strong, Inc. (NYSE: BTN), reported on November 08, 2016, its financial results for the third quarter ended September 30, 2016. AWS will be initiating a research report on Ballantyne Strong in the coming days.
Today, AWS is promoting its blog coverage on GPRO; touching on BTN. Get all of our free blog coverage and more by clicking on the links below:
Commenting on the matter, Nicholas Woodman, CEO of GoPro said:
"Consumer demand for GoPro is solid and we've sharply narrowed our focus to concentrate on our core business. We are headed into 2017 with a powerful global brand, our best ever products, and a clear roadmap for restored growth and profitability in 2017."
Decoding the Restructuring efforts
The restructuring would include stern steps like cutting of 200 jobs, i.e. approximately 15% of the Company's workforce, closing of its entertainment division, and reductions in amenities. The company expects the entire restructuring exercise to cost anywhere between $24 million-$33 million. This cost would include cash expenditure due to job cuts. The major part, i.e. approximately $13 million-$18 million of this would be towards severance pay to employees and $11 million-$15 million would be towards encashing stock options by employees. The entire costs for restructuring would be reflected in the Company's earnings results in the last reported quarter of 2016.
Apart from the restructuring, the company also announced changes at the helm. GoPro's current President, Tom Bates, will exit the company at the end of the year. Tom has been with the company since June 2014. He has earlier worked with Microsoft and Skype. There is no clarity regarding the exact reason for his exit.
Moreover, GoPro's entertainment division was started with the aim of cashing in on GoPro's user-generated content which would be streamed across multiple platforms. This user generated video content was promoted using a rewards system. GoPro's ambitions to become a media company have been thwarted at an early stage as the Company plans to shut down this division.
On the brighter side, GoPro disclosed on the same day, that Black Friday camera sales were up more than 35% on a year-on-year basis following Thanksgiving holiday. Its direct online sales surged as well by 33% during that period. However, the Company's products have been struggling to sustain and attract consumers.
GoPro, which is mainly into action-cameras and a new drone product, has been struggling financially to stay profitable. GoPro Hero cameras face increased competition from established brands like Garmin, Sony, etc. as well as new-age companies like Apple and Snap, who have launched camera glasses, which offer similar/better consumer experience. GoPro's drone product too faces severe competition from Chinese manufacturer SZ DJI Technology Co.
GoPro launched its cube shaped action camera Hero 5 in September 2016 along with its "Karma" drone and started shipping both products in October 2016. However, in a major setback to the company, on November 08, 2016, GoPro announced that it was recalling all units of "Karma" drone sold since the launch, i.e. approximately 2,500 units. Some of the drones reportedly fell out of the sky as they lost power during operation. Due to this, GoPro faces a lawsuit that claims the company violated federal securities law and that it knowingly overstated the capabilities of the drone.
At the close of trading session on November 30, 2016, GoPro's stock price rose 1.53% to end the day at $9.98. A total volume of 6.19 million shares were exchanged during the session. The stock currently has a market cap of $1.40 billion.
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