Fitbit has returned to a growth in device sales, but the company has just released a lower earnings forecast for the current quarter.
The handset maker reported net income of $ 15.4 million, or 6 cents a share, compared with a loss of $ 45.5 million, or 19 cents a share, in the same period last year. 'Previous exercice. After adjusting for stock-based compensation and other effects, Fitbit
IN SHAPE, + 3.93%
reported earnings of 14 cents per share, compared to an adjusted loss of 2 cents per share a year ago. Revenues were virtually stable at $ 571.2 million compared to $ 570.8 million in the same period last year. Analysts surveyed by FactSet expect Fitbit to earn an adjusted profit of 7 cents per share on a $ 569 million business figure.
The stock was down 3.6% after trading hours on Wednesday.
General Manager James Park told MarketWatch that this last quarter was the first since 2016 when the company recorded an increase in the number of devices sold. Fitbit will seek to better monetize its active user base, which grew by 9% in 2018, thanks to a new pay software offering to be launched in the second half of the year.
Do not miss: Best Buy sees an opportunity in foldable phones and smart home technology
For the current quarter, Fitbit expects an adjusted loss per share of 22 to 24 cents on revenues of $ 250 million to $ 268 million. This figure is well below analysts' estimates, which predict a loss of 15 cents per share for a turnover of $ 272 million, according to FactSet. Fitbit expects revenue of $ 1.52 billion to $ 1.58 billion for the full year, compared to $ 1.57 billion forecasted by FactSet.
CFO Ron Kisling told MarketWatch that the outlook for the first quarter was that March was generally the slowest period for Fitbit, which weighed on margins as the company still has fixed manufacturing costs. He expects gross margins to increase over the course of the year.
Fitbit saw its business figure increase by 8% in 2018 thanks to its health solutions business, which focuses on the integration of wearable devices into insurance plans and wellness plans. be. Management expects revenue growth in this sector of the company to accelerate in 2019 to approximately $ 100 million. Health solutions efforts have been of interest to investors in recent months as they represent Fitbit's efforts to become less dependent on device sales to consumers, but Wedbush has recently downgraded Fitbit's shares due to a lack of support. information about the company's health efforts.
Previously: Fitbit CEO wants to move from tracking steps to extended life
Park acknowledged that the $ 100 million target still represented less than 10% of the company's total revenue, but called it a "milestone" and said the double-digit growth rate waited was healthy. According to Park, many factors are behind the growth of health solutions, including the recent introduction of two wearable devices specifically designed for healthcare plans. The company's Fitbit Care program, which combines coaching and software to help people achieve their health goals, is also starting to emerge, he said.
Read: Apple investors want mergers and acquisitions to accelerate service growth, analysts say
The company ended the quarter with a balance of $ 723.4 million in cash and marketable securities, about 42% of Fitbit's market value at Wednesday's close.
"We feel really good [the cash position] given the seasonal nature of the incomes, "said Kisling. "It is important that we be able to invest in growth and opportunities to deepen our relationships with our clients, including investing in the service sector and expanding our reach in healthcare."
The stock has gained 29% in the last three months, at the close on Wednesday, while the S & P 500 Index
grew by 4% during this period.