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Fitbit 4Q18 results -4
16:30 27-Feb-19
Fitbit has released its results for the fourth quarter:
- 14 cents of EPS beats by 6 cents
- on $571M in revenue, which beats by $2M
- 1Q19 guidance for a loss of 23+/-1 cents per share on $259+/-9M miss by 8 cents and $13M
- FY19 revenue
guidance for $1.55b also misses by
$500M
What I see here is that Fitbit is having to cut prices to sell
devices. Gross margins were the lowest in recent memory, and
partnerships won't help nearly enough, as management expects
Health Solutions revenue to grow to $100M this year. The company
took what appears to have been its best shots in 2018 and still
wound up with negative $12M in free cash flow, excluding a big tax
refund.
That said, the company does appear to be doing a good job keeping
a lid on costs as it tries to defend or even regrow lost
market share. FIT shares are back down below the $6 mark
that I've cited all along, and I don't foresee a whole lot more
downside. However, my original of hope of Fitbit out-competing in
smart watches with the still
attractive technology it acquired from Pebble is all but
dead. We've known that for a while now, and I think enough has
been said here.