Fitbit (NYSE: FIT) shares soared early Thursday after the company beat earnings and revenue expectations for the third quarter.
The fitness tracker manufacturer reported earnings of four cents per share, confounding analysts who had expected a loss of one cent per share. The company reported $394 million in revenue compared to the $381 million the Street estimated.
Fitbit also gave guidance for fourth-quarter earnings that exceeded analysts' estimates. The company expects earnings greater than seven cents per share compared to the six cents per share analysts estimated.
Fitbit, however, expects revenue to be above $560 million in the fourth quarter, while analysts expected $569 million.
In the third quarter, the company said its smartwatch revenue grew to 49% of total revenue, up from less than 10% a year ago.
In September, the company launched a new platform called Fitbit Care.
The service offers personalized coaching to help users stay on track with their fitness plans, lose weight and manage chronic diseases.
CEO James Park said, "We have been incredibly focused on executing our transition plan and as a result, saw a return to profitability this quarter, and are re-affirming our full year revenue guidance of $1.5 billion. We succeeded in growing our health-care business by 26% and diversifying our revenue to compete in the changing wearables category and saw sequential growth in both tracker and smartwatch devices.
“We are now the number two player in the smartwatch space in the U.S. - a category we just entered with zero share only 14 months ago."
Shares of the company opened higher by 81 cents, or 17% to $5.54 Thursday. The stock is down 17% this year.
