The fitness tracker industry was slowly heading towards anonymity with fewer sales than the fitness boom predicted. However, Apple is not ready to give up on Fitbit just yet. On the contrary, the tech behemoth is planning a huge surprise this holiday season. This is when Fitbit will finally be ready to launch its new smartwatch. In the mean time, the company recorded an impressive share surge on Thursday.
The Share Surge Was Due to Earnings above Expectations and the Announcement of a New Fitbit Smartwatch
Year after year, the Fitbit kingdom was assaulted by new waves of low earnings and revenue. However, on Thursday the value of the company skyrocketed. The reason behind this surprising momentum is not a financial reversal. Instead, the company claimed that all issues with their new flagship smartwatch production had been overcome and the product is ready for a launch by the end of 2017. As a consequence, the shares indicated a 14.6% boost.
On the other hand, Fitbit continued to report low business numbers for the second financial quarter. For instance, the revenue stopped at $353.3 million which represents a 39.8% decrease year over year. However, the parameter was $12 million higher than analysts’ expectations. This was another event that triggered the share surge in the end.
Over the last three months, the company delivered 3.4 million devices which is lower than last year’s performance of 5.7 million sales. On the other hand, the second quarter indicates a 14% boost in sales compared to the beginning of the year.
From now on, Fitbit will have to hold tight for another average quarter. However, the second half is going to deliver an impressive boost in sales thanks to the launch of its next smartwatch. Fitbit CEO James Park claimed that the novel product would see the shelves before the holiday season, despite numerous software and development issues.
Therefore, the upcoming event is of utmost importance. It needs to show investors that Fitbit is capable of a real turnaround. On the other hand, a failure might create a one-way street to failure.
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