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Fitbit sees current-quarter revenue below estimates, shares fall 11 percent
(Reuters) - Wearable device maker Fitbit Inc forecast current-quarter revenue below analysts’ estimates on Wednesday, as the company expects its average selling price to drop, sending its shares down 11 percent in extended trading.
Fitbit has moved into the smartwatch market to cushion the hit from slowing growth of its popular colorful fitness trackers, but has faced tough competition from deeper-pocket companies such as Apple Inc and Samsung Electronics.
The company said its gross margin could come under pressure this year from the shift toward smartwatches and a lower warranty benefit.
Fitbit said it expects first-quarter revenue to be between $250 million and $268 million. Analysts on average were expecting revenue of $272.3 million, according to IBES data from 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 Dec. 31, beating estimates of 5 million, according to research firm FactSet. Average selling price decreased 2 percent to $100 per device.
The company said new devices, including Versa, Ace and Charge 3, represented 79 percent of the total revenue.
Rival Garmin Ltd last week forecast full-year revenue and profit above expectations as well as a strong fourth quarter.
Fitbit reported a profit of $15.4 million, or 6 cents per share, for the quarter ended Dec. 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 rose marginally to $571.2 million from $570.8 million.
Analysts on average had expected the company to earn 7 cents per share, on revenue of $569.3 million.
Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila
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