Fitbit's Q4 is a miss, strong 2017 guidance lifts stock

Fitbit also revealed that it paid just $23 million to acquire the assets of rival smartwatch maker Pebble in Q4 2016.

Fitbit's fourth quarter financial results missed estimates across the board.

The wearables maker reported net loss of $126 million, or 65 cents a share. Non-GAAP earnings were a loss of 56 a share on revenue of 573.8 million.

Wall Street was bracing for a loss of 54 cents a share on revenue of $576 million.

In terms of device sales, Fitbit said it sold 6.5 million wearables in Q4 and 22.3 million devices in all of 2016.

Fitbit's US revenue shrank 28 percent in Q4 and APAC revenue contracted 56 percent. The EMEA region was the only area with solid revenue growth at 58 percent.

Fitbit also revealed that it paid just $23 million to acquire the assets of rival smartwatch maker Pebble in Q4 2016. The deal included Pebble's software assets, intellectual property and personnel and had an expected value in the range of $40 million.

For the first quarter of 2017, Fitbit expects revenue between $270 million and $290 million, and a net loss of 18 cents to 20 cents per share. Analysts, however, had forecast a loss of 16 cents a share on revenue of $307 million.

Fitbit's financial outlook is a bit more promising for the fiscal year. The company projects revenue of $1.5 billion to $1.7 billion with a net loss between 22 cents to 44 cents. Analysts are looking for 2017 revenue of $1.59 billion and a loss of 39 cents per share.

Fitbit's stock was up around two percent in after hours trading.

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