Tech

Fitbit's stock plunges after the company says it's losing money

Key Points
  • Shares of Fitbit plunged as much as 15 percent in after-hours trading on Monday.
  • The wearable technology company lost 2 cents per share on revenue of $571 million in the fourth quarter.
  • "In 2018 we'll focus on managing down expenses," the CEO said.
Fitbit plunges on weak results, poor guidance
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Fitbit plunges on weak results, poor guidance

Shares of Fitbit plunged as much as 12 percent in pre-market trading Tuesday — a day after a disappointing quarterly report.

Shares shed as much as 15 percent in extended trading Monday.

The wearable technology company lost 2 cents per share on revenue of $571 million in the fourth quarter. Analysts polled by Thomson Reuters expected a break-even quarter for Fitbit, with revenue of $589 million.

Consumer hardware is a notoriously difficult business. The company sold 15.3 million devices in the full year of 2017, a dramatic downswing from the 22.3 million sold in 2016. And Fitbit's slow holiday season sales come as Apple's new cellular smartwatch, and tighter focus on health, have boosted its wearable business.

That's going to continue to put pressure on Fitbit. The company said it expects a revenue decline of 15 percent to 20 percent in the current quarter with "consumer demand shifting towards smartwatches."

"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," James Park, co-founder and CEO, said in a statement.