Fitbit shares dropped by as much as 14% in early trading on Tuesday after the company reported quarterly results.
The earnings release Monday showed that fourth-quarter profits and revenues crushed estimates, but guidance for the current quarter was weak.
Fitbit said higher manufacturing costs and the global launch of new products — the Blaze and the Alta — would affect its first-quarter results.
The company said it expected first-quarter revenues to come in at $420 million to $440 million, below the $484.6 million that the Bloomberg consensus was anticipating.
The maker of fitness trackers posted adjusted earnings per share of $0.35 for the fourth quarter and revenues of $711.6 million.
Fitbit had been expected to report quarterly adjusted EPS of $0.25 on revenues of $648 million.
Ahead of the release, analysts had focused on whether Fitbit was thriving amid increasing competition in the market for wearables.
Over the holidays, the app surged on the Apple App Store charts, suggesting to some that Fitbit devices were a popular gift item.
Fitbit said it sold 8.2 million devices in the fourth quarter. It said 79% of its revenues were derived from new products, including the Charge and the Surge.
And for the full year — Fitbit's first as a publicly traded company — 21 million devices were sold, as the company earned $1.9 billion in revenue.
CEO James Park said in the earnings release: "We believe we are beginning 2016 with strong customer engagement and retention, an accelerating pace of innovation and competitive differentiation, and a foundation of significant revenue growth and profitability in 2015."
Fitbit shares were up about 5% at the end of trading on Monday. They have fallen about 45% over the past 12 months.
Here's a chart showing the drop in early trading:
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