February 27, 2019 / 9:16 PM / 8 months ago

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.

FILE PHOTO: The ticker symbol for Fitbit is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) February 23, 2016. REUTERS/Brendan McDermid

Fitbit has moved into the smartwatch market to cushion the hit from slowing growth of its popular colourful 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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