News

Fitbit sees current quarter revenue below estimates of market shares 11 percent

(Reuters) – Wearable device maker Fitbit Inc forecast current-quarter revenue below analysts’ estimates on Wednesday, as the company expects that the average selling price drops, sending the shares down 11 percent in the extended trade.

FILE PHOTO: Fitbit Blaze watches to be shown 2016 at the CES trade show in Las Vegas, Nevada January 6, 2016. REUTERS/Steve Marcus/File Photo

Fitbit has moved into the smartwatch market to absorb the hit from the slowdown in the growth of the popular colorful fitness trackers, but faced with the stiff competition from deeper-pocket companies such as Apple and Samsung Electronics.

The company said that the gross margin may come under pressure this year from the shift in the direction of smartwatch and a lower warranty allowance.

Fitbit said that it expects first quarter revenue between $250 million and $268 million. Analysts on average were expecting a revenue of $272.3 million, according to IBES data of Refinitiv.

The company forecast adjusted net loss per share in the range of 24 cents to 22 cents, while analysts were projecting a loss of 15 cents.

Fitbit sold 5.6 million devices in the fourth quarter ended december. 31, beating estimates of 5 million, according to research firm FactSet. The average sales price declined by 2 percent to $100 per device.

The company said that the new devices, including Versa, Ace and Costs 3, represented 79 percent of total revenue.

Rival Garmin Ltd. last week forecast full-year revenue and profit than expected, as well as a strong fourth quarter.

Fitbit reported a profit of $15.4 million, or 6 cents per share, for the quarter ended december. 31, compared with a loss of $45.5 million, or 19 cents per share, a year earlier.

Excluding items, the company earned 14 cents per share.

Revenue increased marginally to $571.2 million from $570.8 million.

Analysts on average had expected the company to earn 7 cents per share, on sales of $569.3 million.

Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila

Follow us

Don't be shy, get in touch. We love meeting interesting people and making new friends.

Most popular