FIT Fitbit Inc

Fitbit Inc. on Monday gave downbeat financial projections for its current quarter, warning that a global launch of new products including its smartwatch will weight on results.

The company's stock, down sharply from its $30.40 opening price in June of last year, dropped 13% to $14.32 in late trading.

New products account for the bulk of sales, underscoring the pressure to keep up with technical advances and shifting consumer tastes. Fitbit's smartwatch, Blaze, will start shipping in March, taking on the market-leading Apple Watch. At $200, Fitbit's Blaze is a less expensive option, but reviews have been mixed. On Monday, the company said pre-order volume has exceeded internal forecasts.

In April, the company plans to launch French, German and Spanish versions of its personalized video workouts FitStar app.

The San Francisco company sees breaking even to posting 2 cents a share in profit in the March quarter on $420 million to $440 million in sales and $1.08 to $1.20 a share for the year on $2.4 billion to $2.5 billion in sales.

Analysts surveyed by Thomson Reuters project profit of 23 cents a share on $484.6 million in sales for the quarter and $1.14 a share on $2.42 billion in sales for the year.

One of the IPO darlings of 2015, Fitbit's stock has stumbled on concerns over the company's long-term business outlook amid growing competition. A secondary offering last year stoked those concerns as company executives and some early investors moved to sell some of their holdings; all of them, however, continue to hold significant stakes in the company. Fitbit raised about $84 million in the offering.

Fitbit is also locked in a legal dispute with rival Jawbone over alleged stolen trade secrets.

Over all, Fitbit reported fourth-quarter profit of $64.2 million, or 26 cents a share, compared with $39.2 million, or 19 cents a share, a year earlier. Excluding stock-based compensation and other items, profit rose to 35 cents a share from 21 cents a year earlier.

Sales nearly doubled to $711.6 million, as the company sold 8.2 million fitness-tracking devices, up from 5.3 million a year ago.

The results were above the company's projections of adjusted profit of 20 cents to 25 cents on revenue of $620 million to $650 million.

The fourth quarter has been historically the company's strongest quarter by sales, accounting for about half of annual sales in 2014, the company disclosed as part of its IPO filings.

Gross margin improved to 48.9% from 46.2%.

Operating expenses surged to $237.8 million in the latest period, from $97.9 million a year earlier.

(END) Dow Jones Newswires

February 22, 2016 17:15 ET (22:15 GMT)

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