Tags: fitbit | earnings | forecast | stock | tumbles

Fitbit Earnings Forecast Adjusted Lower Causing Stock to Tumble

Image: Fitbit Earnings Forecast Adjusted Lower Causing Stock to Tumble

Fitbit introduced its new fitness trackers, Fitbit Charge 2 and Fitbit Flex 2, on Aug. 23, 2016, in New York City. (Dave Kotinsky/Getty Images for Fitbit)

By    |   Thursday, 03 Nov 2016 05:25 PM

Maker of wearable fitness devices Fitbit released a lower-than-expected earnings estimate for the fourth quarter of 2016.

On news of adjusted earnings per share of $0.14 to $0.18, down from analysts’ forecasts of $0.75, Fitbit’s stock dropped more than 30 percent in trading Thursday.

Fitbit CEO James Park said in the earnings statement Wednesday, “We continue to grow and are profitable, however not at the pace expected.” Revenue growth for the third quarter grew 23 percent, with earnings of $504 million.

Softer-than-expected demand in the fitness wearables sector and production problems with the new Flex 2 wristband were the main causes for the lower estimates. Reuters reported Fitbit found it much more difficult than they thought to find small enough batteries to power the new devices, CFO Bill Zerella said.

Competition is also getting fierce in the fitness wearables market with Apple, Samsung, and Garmin making similar devices. Still, Fitbit is the leader in the wearable devices market, Reuters reported, and had beat analysts’ estimates until this quarter.

“Fitbit’s destiny isn’t completely within their control. Unless companies find a way to get a mass market of consumers to put ... devices on their wrists, there’s a limited upside there,” said Forrester analyst Julie Ask, Reuters reported.

Fitbit’s two newest products, Charge 2 and Flex 2, have sold 5.3 million devices since late August, beating estimates of 5 million. Its average selling price dropped to $93 from $99 in the second quarter, however, so Fitbit's revenue was down slightly below analysts’ estimates.

© 2017 Newsmax. All rights reserved.

   
1Like our page
2Share
TheWire
Maker of wearable fitness devices Fitbit released a lower-than-expected earnings estimate for the fourth quarter of 2016.
fitbit, earnings, forecast, stock, tumbles
252
2016-25-03
Thursday, 03 Nov 2016 05:25 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved