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GoPro Investors Swim With The Sharks Ahead Of Q1 Earnings

GoPro ( GPRO ) investors are bracing for the worst as the maker of wearable action cameras prepares to report first-quarter results after the market close Thursday. GoPro stock fell 2.2% to 11.40 on the stock market today . A year ago, the stock traded near 50. Analysts polled by Thomson Reuters expect the San Mateo, Calif.-based company to lose 60 cents a share in Q1, compared with earnings per share of 24 cents in the year-earlier period. Sales are forecast to decline 53% to $169.1 million. For the current quarter, Wall Street is modeling for GoPro to lose 43 cents a share, compared with year-ago earnings of 35 cents a share, on sales of $245.6 million, down 42%. GoPro is facing concerns about market saturation and pricing pressure from competitors, including Garmin ( GRMN ), Sony ( SNE ) and others. Possible catalysts for the company include an upcoming flying-camera drone — a quadcopter called Karma — and devices for recording 360-degree videos for virtual reality headsets like Facebook ’s ( FB ) Oculus Rift. Karma is expected to debut this quarter. “We applaud GoPro’s recent moves to build a deeper technical bench and listen closely to customer and partner demands.” Oppenheimer analyst Andrew Uerkwitz said in a research report Tuesday. “However, we remain sidelined as upcoming product releases (drone, flagship camera, and possibly a 360-degree camera) can introduce much volatility.” Uerkwitz rates GoPro stock as perform, or hold. “We believe the March quarter results and June quarter guidance could be a bit rough as the company is in full-on transition mode,” Uerkwitz said. “We may see inventory issues (the March quarter is typically slow) for older cameras in the channels.” Dougherty analyst Charles Anderson reiterated his neutral rating on GoPro stock in a report Wednesday. “GoPro is currently suffering from a stale product portfolio and delayed efforts to improve editing software and general usability,” Anderson said. “This is harming demand and leading to declining sales. “The response has been a large increase in both R&D and sales and marketing spend, which is going to lead to near-term losses. We believe the company needs new, and differentiated, products to pull it out of the hole.” RELATED: GoPro Finds Woe In High Action-Camera Inventories

Tesla Forecasts Production, Spending Hikes Amid Strong Demand

Tesla Motors ( TSLA ) expects to ship 20,000 cars in Q2, up 30% sequentially, and said capital expenditures will be 50% higher than previous guidance of $1.5 billion. The electric car maker is also bumping up its 500,000 unit build plan by two years to 2018 due to the “overwhelming demand” for the Model 3. Tesla lost 57 a share in Q1, deepening the 36-cent loss in last year’s Q1, and slightly beating consensus for a 58-cent per-share loss. This included a 7-cent positive impact from “unrealized gains from revaluation of our foreign currency transactions,” according to management’s letter to shareholders. Non-GAAP sales rose 45% to $1.6 billion, and GAAP sales totaled $1.15 billion. Analysts were expecting $1.6 billion. Tesla shares jumped 5.5% in late trading, after closing down 4% in the regular session. Tesla said “we remain confident that we can deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016.” It added that it expects 30% gross margin on the Model S sedan and 25% on the Model X SUV by year-end. At the same time, it predicted a 20% to 25% operating-expense increase by year-end. Earlier Wednesday, Bloomberg broke the news that Greg Reichow , Tesla’s vice president of production, and manufacturing chief Josh Ensign will exit the company, bringing the number of vice presidents who’ve left so far this year to five. Reichow, who joined in 2011, was a particularly significant player at Tesla, having led a team responsible for “building an all-new manufacturing organization from the ground up and for making Model S and Model X a reality,” according to Chief Executive Elon Musk. Reichow’s departure was described as a leave of absence, but its length wasn’t specified. Bloomberg also cited an anonymous source saying that glitches in the launch of the Model X were tied to the executives’ departures, though Tesla denied this.

Fitbit Beats Q1 Targets, But Disappoints On Q2 EPS Outlook

Fitbit ( FIT ) late Wednesday smashed Wall Street’s targets for the first quarter, but delivered mixed guidance for the current quarter that disappointed investors. Fitbit stock plunged as much as nearly 12% in after-hours trading following the earnings news release. In Wednesday’s regular session, Fitbit stock dipped a fraction, to 17.10. Fitbit made its IPO last June, pricing shares at 20. The maker of wearable fitness devices earned 10 cents a share excluding items on sales of $505.4 million. Analysts polled by Thomson Reuters expected 3 cents and $444.3 million. On a year-over-year basis, Q1 sales rose 50%. But that’s down from 92% growth in Q4, 168% in Q3 and 253% in Q2. Q1 earnings per share dropped 63% from 27 cents in the year-earlier period. For the current quarter, Fitbit is projecting earnings per share of 8 to 11 cents excluding items on sales of $565 million to $585 million, or $575 million at the midpoint. Wall Street had been modeling for Fitbit to earn 26 cents a share, up 24%, on sales of $531.3 million, up 33%. For the year, Fitbit expects non-GAAP EPS of $1.12 to $1.24 on sales of $2.5 billion to $2.6 billion. Analysts on average were looking for 2016 EPS of $1.13 on sales of $2.46 billion. Fitbit competes in the health-and-fitness wearables market with Apple ( AAPL ), Garmin ( GRMN ), Microsoft ( MSFT ), Under Armour ( UA ) and others. Last week, Fitbit announced a distribution deal Chinese e-commerce website Tmall.com , a unit of Alibaba Group ( BABA ), that could bolster its prospects in China.