San Francisco-based wearable device maker Fitbit Inc. posted estimate-beating first quarter results, as well as reaffirming its full-year revenue forecast from $1.52 billion to $1.58 billion as its sales of smart watches and other wearable health tracking devices elevated shares by 1.5% to $5.45.
As smartphone sales doubled in the quarter, analysts believe it is the newly launched Inspire Line that alone made up 67% of the revenue in the said quarter.
The company sold 2.9 million devices in the first quarter, 36% higher than the sales in the same quarter a year ago. However, average selling prices declined by 19% to $91 per share as the company shifted focus to cheaper devices to compete tech giants like Apple and Samsung. This is just short of analysts’ estimates of selling 2 million devices at an average selling price of $109.33.
To compete with other tech rivals, the company concentrated on value prices. Inspire sold at $69.95, and the HR version capable of heart monitoring sold at $99.95. Apple’s smart watches start at $279 and Samsung’s watches and trackers lead in at $200.
Fitbit’s Health Solutions business segment clocked in 70% growth during the quarter posting revenue of $30.5 million. The unit is allows subscription-based fitness coaching services that connect users with doctors and other health care professionals.
The company also recouped from its losses that came at $79.5 million or 31 cents per share compared to $80.9 million or 34 cents per share during the same first quarter a year ago. Revenue rose to $271.9 million from $247.9 million, above Wall Street expectations of $259.7 million.
For the second quarter, Fitbit forecast revenue between $305 million and $320 million, and an adjusted loss between 17 cents to 20 cents per share, slightly higher than analysts’ estimate loss of 16 cents.