Shares of Fitbit Inc plunged 16% in premarket trade Monday after the company slashed its fourth-quarter guidance due to softer-than-expected demand. Fitbit said it expects an adjusted loss per share of 51 cents to a loss of 56 cents, after previously announcing guidance of a profit of 14 cents to 18 cents. To reduce expenses, the company said it plans to cut about 110 employees or 6% of its workforce, which is expected to cost the company $4 million in the first quarter of 2017. Fitbit also plans to reduce its 2016 exit operating expense rate by $200 million to about $850 million. It expects fourth-quarter revenue to be in the range of $572 million to $580 million, compared to the company's previously announced guidance of $725 million to $750 million. It expects to report 6.5 million devices sold in the fourth-quarter. The company said it expects a "materially higher" non-GAAP effective tax rate for the fourth quarter. Fitbit said it expects a "stabilization" of financial performance in the second half of 2017, with expected adjusted losses of 22 cents to 44 cents per share for the full year and revenue of $1.5 billion to $1.7 billion for the year. Shares of Fitbit have fallen 46.5% in the past three months, compared to the S&P 500's gain of 8%.
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