Fitbit Inc. shares rose over 10% in after-hours trading on Wednesday after the wearables pioneer posted a surprisingly-adjusted gain in the third quarter. It was the first time in two years that Fitbit achieved a positive adjusted profit.
The company achieved adjusted quarterly earnings per share of 4 cents for revenue of $ 393.6 million. Analysts polled by FactSet expected a loss of 1 cent per share and revenues of $ 381.3 million. Sales rose slightly year-on-year, after many years of decline.
FIT, + 7.01%
The profit surplus reflected progress in the company's cost-cutting efforts, with operating expenses down 1
International sales increased 10% during this period, driven by strength in Europe, the Middle East and Africa. Park said he sees a "very positive" demand for lot 3 in the region.
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. Fitbit expects the device mix to move toward vacation due to recent development launch of Charge 3, which revived the company's tracker offerings and was unavailable for much of the third quarter. Management expects this mix to shift to "slightly increase" the gross margin.
Overall, Fitbit forecasts adjusted earnings per share of 7 cents for the December quarter, above the 5 cents modeled by analysts.
The company has tried to go beyond selling equipment to consumers and providing more revenue opportunities in the general healthcare sector, but this business has been slow to develop. Management declined to discuss specific figures for the health solutions business, but Park said the 26% revenue growth for this area was a "big achievement" and reflected the fact that disease management for health plans and health care plans was a major challenge Insurer plays an increasingly important role.
"We were able to take advantage of this need," Park told MarketWatch.
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Fitbit ended the quarter with $ 623 million in cash and marketable securities on its balance sheet just over half of its market value from Wednesday's end. CFO Ron Kisling told MarketWatch that while the company has sufficient working capital, "it is important to preserve the opportunities to invest in growth." The company sees potential to strengthen its service business and continue to dive into the health ecosystem.
Equities fell 23% in the last 12 months at the close on Wednesday, compared to a 5.3% rise for the S & P 500
SPX, + 1.09%