How Will GoPro Inc (NASDAQ:GPRO) Sponsorship Of Drone Racing Improve Its Fortunes?

How Will GoPro Inc (NASDAQ:GPRO) Sponsorship Of Drone Racing Improve Its Fortunes?

GoPro Inc (NASDAQ:GPRO) is throwing its weight behind the 2016 U.S. National Drone Racing Championships organized by Drone Sports Association (DSA). The maker of Hero cameras said that it will be featured at the event as a presenting sponsor, which will take place in New York. The drone championship comes at a time when GoPro has delayed the release of its own consumer drone product called Karma.

GoPro initially promised that it would release Karma in 1H2016, but toward the end of 2Q2016, the company moved back the launch date and said the earliest it could release Karma was in the winter. As such, GoPro’s Karma will not be among the drones that will compete during the national drone championship event.

It is not clear how playing the role of presenting sponsor will bolster GoPro’s own drone business, though it certainly might. The company could seize the opportunity to increase awareness about its action cameras that have become favored by drone pilots to shoot aerial videos.

Specifically, GoPro’s role at the drone championship will be to crown the fastest drone pilot in the U.S., which will be the coveted title at the competition.

Other sponsors

Besides GoPro, other sponsors of the National Drone Racing Championship include technology company EMC Corporation (NYSE:EMC), consultant firm Ernst & Young and insurer American International Group Inc (NYSE:AIG).

According to AIG’s U.S. head of commercial insurance, Jeremy Johnson, the insurer is among the first insurance companies to be granted approval by the Federal Aviation Administration (FAA) to operate drones with the a view of risk assessment and management.

As such, Johnson said that they are proud to be part of the national drone championship as the official insurance partner of the event.

The National Drone Racing Championships event, which features GoPro as presenting sponsor, will be streamed live on ESPN3. The event will run between August 5 and August 7 on the Governors Island in New York.

2Q2016 earnings report

GoPro is set to release its 2Q2016 earnings on Wednesday after the close of regular market activities. But analysts don’t seem to be excited about the company’s earnings. A survey of analysts by Reuters shows that the consensus estimate calls for EPS loss of $0.58 on revenue of $194.3 million. The company posted EPS profit of $0.35 on revenue of $419.9 million in the same quarter last year. Dwindling demand for GoPro’s action cameras has been the cause of pressure on the company’s earnings lately.