(Reuters) - GoPro Inc raised its full-year revenue forecast and reported a smaller-than-expected loss on Thursday, boosted by strong demand for its new line of action cameras from its flagship brand HERO, sending its shares up 13 percent.
The company’s action cameras, which are popular among surfers, sky divers and Instagram travel bloggers, have been facing stiff competition from smartphones with constantly improving camera quality.
Despite the challenges, the company said average selling prices for HERO7 Black camera rose 8 percent.
The company raised its revenue forecast for 2019 to between 7 percent and 10 percent, from its previous forecast of 5 percent and 8 percent.
GoPro also said it expects most of its cameras for the U.S. market to be made in Mexico in the second half of 2019.
“Our decision to move most of our US-bound production to Mexico supports our goal to insulate us against possible tariffs as well as recognise some cost savings and efficiencies,” Chief Financial Officer Brian McGee said on a post-earnings call with analysts.
The San Mateo, California-based company said its sales through retailers grew 11 percent in Asian markets, including Japan, China and Korea, and reported an 89 percent share of the U.S. action camera market by units.
The company incurred a net loss of $24 million, or 17 cents per share, in the first quarter ended March 31.
Excluding one-time items, the loss was 7 cents per share. Analysts had expected a loss of 9 cents, according to IBES data from Refinitiv.
The company has managed to keep losses in check and revive margins through job cuts and by exiting its drone business.
Quarterly revenue jumped 20 percent to $243 million, beating Wall Street analysts’ average estimate of $234.4 million.
GoPro also said it expects second-quarter revenue in the range of $285 million to $305 million. Analysts were expecting $292.8 million.
Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli