Fitbit reported a smaller-than-expected quarterly loss as the maker of wearable devices reined in costs, sending its shares up 7.6% in after-market trading on Wednesday.
Fitbit, which struggled with a lackluster holiday quarter and production issues that weighed on sales, is reorganizing its business to focus on two areas – consumer health and fitness and enterprise health.
The company, whose colorful wristbands and clippable widgets help track heart rate, calories, sleeping patterns and step counts, has termed 2017 “a transition year” and has lined up plans to enter new markets such as smartwatch.
Fitbit’s revenue fell 41% to $298.9 million in the first quarter ended April 1. The company said average selling price declined 4% to $96.45 per device.
Analysts on average had expected revenue of $280.8 million.
“Consumer demand has been better than our reported results in North America as we work down channel inventory levels,” Chief Executive Officer James Park said in a statement.
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The company posted a loss of $60.1 million, or 27 cents per share, compared with a profit of $11 million, or 5 cents per share, a year earlier.
Excluding items, the company posted a loss of 15 cents per share, smaller than the average analysts’ estimate of an 18 cents loss, according to Thomson Reuters I/B/E/S.
The company’s total operating expenses fell 2.5% to $209.7 million.
Fitbit’s shares (FIT) were trading at $6.11 in afer-market trading on Wednesday. They had fallen 22.4% this year, through Wednesday’s close of $5.68.
