(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.
FILE PHOTO: Fitbit Blaze watches are displayed during the 2016 CES trade show in Las Vegas, Nevada January 6, 2016. REUTERS/Steve Marcus/File Photo
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