(Reuters) - GoPro Inc reported its first profit in five quarters on Wednesday and topped Wall Street estimates for revenue, as it cut costs and saw strong demand for the latest action cameras from its flagship HERO line.
GoPro, whose mounted cameras are used by everyone from action junkies to Instagram travel bloggers, has launched cheaper cameras to drive demand, exited a failing drone business and become leaner through job cuts, helping it revive profit margins. Still, its action cameras face stiff competition from ever-improving cameras on smartphones.
GoPro shares rose 2 percent in after-hours trading, paring gains from an initial 10 percent jump.
In the fourth quarter ended December, GoPro gained market share in Asian markets including Japan, China, Korea and Thailand, while in the United States it had an 87 percent share of the action camera market by units, the San Mateo, California-based company said.
“It appears that GoPro accurately planned its Q4 inventory,” said Wedbush Securities analyst Alicia Reese. “HERO7 Black sold very well in Q4, driving ASPs 20 percent higher,” she said, referring to average selling prices.
GoPro’s HERO 7 Black camera, which carries a $400 (£309) price tag, was its top-selling product in the December quarter without discounting, Chief Financial Officer Brian McGee said on a conference call with analysts.
The company also projected revenue of between $510 million and $550 million for the first half of 2019.
“With this momentum and a continued focus on expense management, we’re planning for growth and profitability in 2019,” GoPro Chief Executive Officer Nicholas Woodman said in a statement.
The company reported a net income of $32 million in the quarter ended Dec. 31, compared with a net loss of $55.9 million a year earlier.
Excluding one-time items, the company earned 30 cents per share, above analysts’ estimate of 26 cents, according to IBES data from Refinitiv.
Revenue surged 13 percent to $377 million, exceeding analysts’ average estimate of $374.2 million.
Reporting by Sonam Rai in Bengaluru; Editing by Sai Sachin Ravikumar