Compared to other consumer electronics makers, Fitbit (FIT) didn't have a great holiday shopping season. Last week, the company reported fourth-quarter earnings results that missed expectations. But shares hardly budged thanks to the pending acquisition by Alphabet (GOOG -1.22%) (GOOGL -0.95%) subsidiary Google, which said in November that it would acquire Fitbit for $7.35 per share in cash.

Here's how Fitbit closed out 2019.

Various Fitbit Versas

Image source: Fitbit.

Missing on both the top and bottom lines

Revenue in the fourth quarter declined 12% to $502.1 million, which was shy of the $531.7 million in sales that analysts were expecting. That led to an adjusted net loss of $31.5 million, or $0.12 per share, while the market was hoping for an adjusted profit of $0.04 per share.

Devices sold climbed 8% to 6 million, but a 19% drop in average selling price (ASP) to $81 led to the top line shrinking overall. The product mix is shifting toward more affordable devices, and increased promotional activity also took a bite out of revenue. Adjusted gross margin took a major hit, shrinking from 38.7% a year ago to 26.3% last quarter -- a decline of over 12 percentage points. Fitbit attributed the pinched profitability to the ongoing shift to smartwatches, which have higher development costs, as well as increased promotional activity and tariffs.

Devices sold reached 16 million for the full year, and the company now has nearly 30 million active users on its digital health platform. Fitbit refreshed its popular Versa smartwatch late last year, and the Versa 2 is enjoying strong demand, according to CEO James Park. The Fitbit Health Solutions segment, which includes corporate wellness plans and other enterprise offerings, grew 17% in 2019 to reach $95 million.

Can Google and Fitbit close the deal?

Much like in the third quarter, investors largely shrugged at the worse-than-expected results since the pending buyout renders the figures somewhat irrelevant as long as the deal can secure regulatory approval.

Fitbit is not hosting an earnings conference call to discuss the results nor is it providing guidance. The wearable tech company had also canceled its third-quarter earnings call for the same reason. Investors would likely appreciate some details around how that approval process is proceeding, but Fitbit isn't sharing much: "Prior to closing, we do not expect to provide any additional updates on the regulatory process other than during subsequent quarterly earnings reports."

The European Data Protection Board (EDPB) last week also warned that the deal carries a "high level of risk to privacy and data protection," and urged Google and Fitbit to ensure that they meet the stringent user data protections implemented by the European Union's General Data Protection Regulation that went into effect in 2018. Meanwhile, the U.S. Department of Justice is reportedly handling the antitrust review.

The companies still expect to close the transaction at some point in 2020.