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Did Fitbit Beat Analysts’ Estimates in 4Q16?

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Feb. 24 2017, Updated 2:40 p.m. ET

Revenue of $573.8 million in 4Q16

US-based (SPY) Fitbit (FIT) announced its 4Q16 results on February 22, 2017, reporting revenue of $573.8 million. This meant a YoY (year-over-year) fall of 19.4% compared to its revenue of $711.6 million in 4Q15.

Fitbit’s gross margin also contracted significantly, from 48.9% in 4Q15 to 22.1% in 4Q16, primarily due to its high inventory levels. In 2016, Fitbit’s revenue rose 16.8% YoY to $2.2 billion, compared to $1.9 billion in 2015.

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During Fitbit’s 4Q16 earnings call, its CEO, James Park, conceded that the company fell short of its financial objectives. He stated, “2016 was an ambitious year for the company driven by robust product pipeline and the anticipation of launching four new products, we had high expectations coming into the year. However, while we remained a global wearable’s leader, we fell short of our goals and did not meet our financial objectives.”

Fitbit’s non-GAAP (generally accepted accounting principles) EPS (earnings per share) fell to -$0.56 in 4Q16, compared to $0.35 in 4Q15.

What did analysts expect from Fitbit in 4Q16?

Analysts had expected Fitbit to post revenue of $576.0 million for 4Q16, with a low estimate of $571.0 million and a high estimate of $580 million. Analysts had expected FIT’s EPS to be -$0.53, with a high estimate of -$0.50 and a low estimate of -$0.56.

Fitbit stock fell 2.7% to close at $5.88 on February 22, 2017.

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