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Fitbit Posts Weak Holiday Quarter Earnings, Looks to Cut Work Force

Joseph Lu

Fitbit Inc. FIT just released its 2016 fourth quarter financial results, posting a loss of $0.63 per share and revenues of $574 million.

Currently, Fitbit is a Zacks Rank #4 (Sell), and is down 2.6% to $5.88 per share in trading shortly after its earnings report was released.

Missed earnings estimates. The company posted a loss of $0.63 per share (excluding $0.02 from non-recurring items), missing the Zacks Consensus Estimate loss of $0.61 per share.

Missed revenue estimates. The company saw revenue figures of $574 million, missing our consensus estimate $630 million.

In Q4, Fitbit sold 6.5 million connected health and fitness device. Though the U.S. revenue fell down by 28% compared to a year ago, EMEA (Europe, the Middle East and Africa) revenue grew 58%. Also, four of Fitbit’s new products represented 96% of revenue.

For 2017, Fitbit is looking to reduce operating costs to improve efficiencies by reducing its 2016 exit operating expense run rate by $200 million. This includes a reduction in force that impacts 6% of the global work force. The company is also hiring a new executive vice president of operations, Jeff Devine, to manage overall operations, customer service, and quality.

“Our ten-year history of building this category, coupled with our powerful brand and engaged global community gives us confidence we are making the right investments to support our vision and drive long-term success,” said James Park, Fitbit co-founder and CEO. “We will leverage our leadership position, recently acquired talent and IP, and the valuable data we collect to improve demand and continue to set the pace of innovation for the industry through more personalized experiences, deeper insights and guidance, expansion into new categories and deeper integration within the healthcare system.”

Here’s a graph that looks at Fitbit:

Fitbit, Inc. Price and Consensus

Fitbit, Inc. Price and Consensus | Fitbit, Inc. Quote

Fitbit Inc. manufactures and markets wearable fitness-tracking devices. The Company’s product consists of Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit Charge HR, Fitbit Surge and Aria. It also offers accessories which include bands and clips, charging cables and Fitbit apparel. Fitbit Inc. is headquartered in San Francisco, California.

Check back later for our full analysis on Fitbit’s earnings report!

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