The video device company’s stock plummeted 23% in after-hours trading following the release of preliminary financial results for the fourth quarter and year-end. Fourth-quarter sales of its video capture devices are expected to fall 31%, to $435 million, from a year ago. Analysts polled by Thomson Reuters were projecting sales of $512 million.
“To better align resources to key growth initiatives,” GoPro also announced it would cut its 1,500-employee workforce by about 7%. The company estimates it will incur approximately $5 million to $10 million of restructuring expenses in the first quarter of 2016, substantially all of which will be severance costs.
Non-GAAP gross margin for the fourth quarter, excluding the impact of price protection and a charge of between $30 million and $35 million to cost of revenue for excess purchase order commitments, excess inventory, and obsolete tooling, is anticipated to be between 44.5% and 45.5%. Excluding these factors, non-GAAP gross margin for the fourth quarter of 2015 is anticipated to be between 34.5% and 35.5%.
GoPro will post its earnings results on Feb. 3.
GoPro shares went public at 24 in June 2014 and hit a record high of 98.47 in October 2014.