Fitbit, Inc. (NYSE: FIT) swung to a profit in the first quarter of 2020 from a loss last year, helped by a tax benefit from net operating loss carrybacks. The bottom-line was wider than the analysts’ expectations while the top-line missed consensus estimates.
The top-line dropped by 31% due to weakness in pricing and devices sold. The company experienced weakness across the US and international. The company sold 2.2 million devices, down 26% year-over-year, due to the introduction of one new product in the latest quarter compared to three new products last year. The average selling price decreased by 11% year-over-year to $81 per device.
![Fitbit (FIT) Q1 2020 earnings](https://cdn.news.alphastreet.com/wp-content/uploads/2020/05/Fitbit-Q1-2020-Earnings-Infographic.jpg)
Fitbit was negatively impacted by the outbreak of COVID-19 during the quarter, which caused disruptions in the development, manufacture, shipment, and sales of its products. The company expects the pandemic and associated mitigation efforts to continue to have a significant negative impact on its results in 2020, including liquidity, although nature and extent will depend on future developments that are evolving and highly uncertain.
On January 3, Fitbit stockholders approved the merger transaction with Google. The stockholders will receive $7.35 per share in cash, valuing the company at a fully diluted equity value of about $2.1 billion. Fitbit and Google are expected to secure the necessary regulatory approvals and close the transaction in 2020. Due to the pending acquisition by Google, Fitbit does not plan to host an earnings conference call nor provide next-quarter or full-year guidance.
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