Fitbit shares plunge on weak quarterly outlook
Shares of Fitbit Inc. plunged 12% in after-hours trade Wednesday after the company issued much weaker-than-expected guidance for the second quarter, despite posting a top- and bottom-line beat for the first quarter. The company reported first-quarter net income of $11 million, or five cents a share, compared with $48 million, or 22 cents, in the year-earlier period. Excluding one-time items, Fitbit said it earned 10 cents a share, topping the three cents analysts had been expecting, according to a FactSet poll. Revenue for the period rose to $505.4 million from $336.8 million last year, ahead of the $446 million consensus estimate. However, the company's second-quarter guidance fell sharply below expectations, as Fitbit said high investments in research and development and marketing would weigh on margins in the near term. The company is calling for adjusted earnings per share of between 8 cents and 11 cents, compared with the Street's expectation of 26 cents a share.
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