GoPro shares rose $1.16, or 15.6 percent, to $8.51 on Thursday after the company announced cost-cutting measures and forecast first-quarter earnings at the high end of guidance.
In a statement, GoPro says it will cut operating expenses in 2017 by $200 million in new restructuring that will include the elimination of 270 jobs. The company will take $10 million in restructuring charges in the first quarter as part of the job cuts.
“We’re determined that GoPro’s financial performance match the strength of our products and brand,” said GoPro Founder and CEO Nicholas Woodman in a statement. “Importantly, expense reductions preserve our product roadmap and we are tracking to full-year non-GAAP profitability in 2017.”
For the first quarter, GoPro forecast revenues to be in the high end of its previously estimated range of $190 million to $210 million. Added GoPro Chief Financial Officer Brian McGee, “We currently have no need to draw on our credit facility and we expect to be EBITDA positive for full-year 2017.”
On a conference call with analysts, GoPro officials insisted the job eliminations won’t impact the company’s roadmap for new hardware and software products.
“We are confident that we are not making those trade-offs,” said Charles “C.J.” Prober, COO. “By being more focused we feel we are improving our efficiency and doing fewer things, better.”
After earning much fanfare with its line of action-friendly, high-definition cameras breaking out as a hit, GoPro has struggled to find its next blockbuster device. The company recently relaunched its Karma drone after recalling it because the device would mysteriously power down during use. A power failure had caused the aircraft to fall from the sky. The foldable Karma drone recently went back on sale.
Last fall, GoPro announced a restructuring that included cutting 200 jobs and shutting down its entertainment division. The job cuts included Tony Bates, who was the president of GoPro since June 2014.
The stock still launched with great fanfare in June 2014, and remains well below its dizzying heights due to a series of disappointing launches and missed projections. In 2016, shares tumbled 91.1 percent to $8.71 from $18.01. The company went public at $24 and hit its high of $98.47 by October 2014.
Photo courtesy GoPro