Fitbit Shares Surge 11% On Earnings, Revenue Beat

Fitbit Shares Surge 11% On Earnings, Revenue Beat

Shares of Fitbit Inc. (FIT) surged about 11% on extended session Wednesday after the wearable tech maker reported a surprise adjusted profit for the third-quarter that also beat Wall Street estimates.

San Francisco-based Fitbit’s third-quarter loss narrowed to $2.1 million or $0.01 per share from $113.4 million or $0.48 per share last year.

On an adjusted basis, the company reported a third-quarter profit of $10.0 million or $0.04 per share, compared with last year’s loss of $2.8 million or $0.01 per share. On average, 11 analysts polled by Thomson Reuters expected Fitbit to report a loss of $0.01 per share. Analysts’ estimates typically exclude one-time items.

Revenues for the quarter grew to $393.6 million from $392.5 million last year. Analysts had a consensus revenue estimate of $381.21 million for the quarter.

“We have been incredibly focused on executing our transition plan and as a result, saw a return to profitability this quarter, and are re-affirming our full year revenue guidance of $1.5 billion., CEO James Park said.

Park said Fitibit grew its healthcare business by 26% and were able to diversify its revenue to compete in the changing wearables category and saw sequential growth in both tracker and smartwatch devices.

“We are now the number two player in the smartwatch space in the U.S. – a category we just entered with zero share only fourteen months ago. We also launched our most advanced tracker yet, Fitbit Charge 3, which is blurring the lines between trackers and smartwatches and is already one of the top selling devices in the U.S.”

Fitbit sold 3.5 million wearable devices. Average selling price increased 3% year-over-year to $108 per device driven by the growing mix of smartwatches.

U.S. revenues, which represented 58% of revenues, dropped 6% year-over-year, while international revenue increased 10% year-over-year to $163 million, helped by 17% growth in EMEA.

Looking forward to the fourth quarter, the company expects adjusted earnings “greater than $0.07 per share” and revenues of “greater than $560 million.” Analysts currently expect earnings of $0.06 per share and revenues of $569.22 million for the quarter.

For the full year, Fitbit continues to expect revenues of about $1.5 billion. Analysts currently expect full year revenues of $1.49 billion.

FIT closed Wednesday’s trading at $4.73, up $0.31 or 7.01%, on the NYSE. The stock further gained $0.52 or 10.99% in the after-hours trade.

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