Fitbit Inc (NYSE: FIT) investors got even more bad news on Monday when the wearable fitness device maker once again failed to turn a profit in the fourth quarter, missing analyst earnings expectations. FIT stock is set to open more than 13 percent lower on Tuesday, an all-time low at less than $5 per share.
Fitbit reported a fourth-quarter adjusted earnings per share loss of 2 cents on revenue of $571 million. Both numbers missed consensus Wall Street estimates of break-even EPS and $588 million in revenue.
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Fitbit also reported 5.4 million wearable device sales in the fourth quarter, down from 6.5 million a year ago. For the full year, Fitbit sold 15.3 million devices, a 31.3 percent decline from 2016.
Looking ahead to 2018, the picture doesn’t get much prettier for Fitbit investors. The company guided for first-quarter revenue of between $240 million and $255 million. Analysts had been expecting $340 million. Fitbit expects a first-quarter EPS loss of between 18 cents and 21 cents and a negative free cash flow of $25 million.
Fitbit also guided for full-year 2018 revenue of $1.5 billion, down about 7.1 percent. The company expects full-year operating expenses to decline 7 percent to $740 million.
Management tried to put a positive spin on the numbers, but Fitbit stock, which was already down 27 percent in the past three months, plummeted in the after-hours session to new all-time lows.
“We made important progress in 2017 under rapidly changing market conditions,” CEO James Park says in a statement. “In 2018 we’ll focus on managing down expenses, continuing to expand in the smartwatch category and supporting our engaged global community on their health and fitness journeys.”
One of the few silver linings in the report for Fitbit investors was the company’s guidance for break-even full-year 2018 cash flow.
Last month, Stifel analyst Jim Duffy said Fitbit’s brand is valuable if the company can demonstrate it can keep its cash burn in check and take steps toward profitability in 2018.
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“While we don’t see a path to profitability in 2018 and continue to have concerns about both the durability of the fitness tracker market and uptake of Fitbit smartwatch offerings, we expect cash burn is limited in 2018,” Duffy said, according to MarketWatch.
Clearly the market didn’t see the big fourth-quarter as a step in the right direction for Fitbit.
Stifel has a “hold” rating and $5.50 price target for FIT stock.
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Fitbit Inc (FIT) Stock Is At an All-Time Low originally appeared on usnews.com
