We're now well into the fourth quarter of the year and that means that revenues have been released for the third quarter. Here are two interesting stories we picked up on from Dorel Industries and GoPro.Dorel Industries
In October, we reported on Dorel Industries' decision to suspend its dividend
due to tariffs impacting revenue, however it seems like the impact hasn't been felt on the bike side of the company.
Dorel Sports, the cycling wing of Dorel Industries, has reported a 14.2% increase in revenue this quarter, up from $219 million to $250 million compared to the same period last year. This is the first double-digit growth in revenue for the company in five years. Dorel Sports includes brands such as Cannondale and GT and credits Cannondale's 2020 lineup, especially its ebikes in Europe, for the growth. Caloi, its Brazilian bike business, also delivered strong double-digit revenue growth thanks to its Yellow Bike Sharing program.
Dorel Industries as a whole saw earnings jump 2.3% in the same period from $670.4 million a year ago to $685.7 million in 2019 however the operating profit was down from $7 million to $6 million.
Schwartz was confident the growth would continue into the fourth quarter, concluding: "With the shift of orders at Pacific Cycle from the third to the fourth quarter, this provides the confidence that the segment will deliver a solid fourth quarter versus the prior year in both sales and adjusted operating profits.”
Dorel's stock remains at record low levels.
Read the report in full here
GoPro's revenue fell 54.1% in the third quarter of 2019 however its stock rose as it still outperformed gloomy predictions from analysts. This continues a rocky period for GoPro that includes the closure of its drone business, falling revenues and the reports that it had hired JPMorgan to explore options for a sale - although this was later denied.
GoPro's revenue was $131 million for the third quarter, down from $285 million last year. However, this was actually $5 million more than expected, which caused a small rise in its value.
In October, GoPro had warned that revenue would fall following a production delay with the new Hero 8 cameras, which shifted the bulk of its sales from the third quarter to the fourth quarter. Unfortunately, GoPro had already announced the camera, which meant demand for the Hero 7 fell as it was no longer the brand's flagship camera. Forecasted growth was cut from 9%-12% to just 6%-9% and management also reduced the midpoint of its adjusted gross margin for the second half of 2019 from 37.5% to 36.5%.
GoPro is now expecting a successful fourth quarter as the Hero 8 hits the market properly. It claims that the Hero 8 and Max are: "generating the highest positive social sentiment metrics of any new GoPro and are setting record unit sales for new cameras at GoPro.com". It also highlighted a 21% growth in subscribers for GoPro Plus, a rise of 21% over the quarter.