(Reuters) - Wearable device maker Fitbit Inc (FIT.N) on Monday forecast current-quarter profit and revenue below Wall Street estimates and predicted lower revenue from newly launched products such as Ionic and Alta HR.
Fitbit shares fell 11.2 percent to $4.92 in after-market trading after the company’s fourth-quarter results also missed estimates due to an about 17 percent drop in sale of its fitness trackers in the holiday quarter.
“Growth in 2017 was impacted by a product lineup that was skewed towards connected health and fitness trackers versus the faster growing smartwatch segment,” Chief Executive Officer James Park said in a post-earnings call with analysts.
Fitbit has been under pressure from rivals such as Apple Inc (AAPL.O), Samsung Electronics (005930.KS), Xiaomi Inc [XTC.UL] and Garmin Ltd (GRMN.O) that have been gaining ground in a fast saturating wearables market.
Going forward, Fitbit would launch more smartwatches to speed up the shift away from fitness trackers, Chief Executive Officer James Park said adding that sales of its Ionic smartwatch took a hit from stiff competition as it was not a ‘mass appeal watch’.
For the first quarter, the company said it expects adjusted
loss per share in the range of 18 cents to 21 cents and revenue of $240 million to $255 million. Analysts on average expected a loss of 9 cents on revenue of $340.3 million.
“Guidance is disappointing relative to our estimates and consensus. The press release indicates that demand for its Ionic smartwatch is strong, but isn’t enough to offset the decline in demand for all of its older fitness trackers,” Wedbush Securities analyst Alicia Reese said.
Revenue in the fourth quarter fell 0.5 percent to $570.8 million in the quarter and missed the average analyst estimate of $588.9 million.
The company’s net loss narrowed to $45.5 million, or 19 cents per share, in the quarter ended Dec. 31, from $146.3 million, or 65 cents per share, a year earlier.
On an adjusted basis, the San Francisco, California-based company reported a loss of 2 cents per share. Analysts on average expected the company to report a break-even, according to Thomson Reuters I/B/E/S.