Garmin today reported its financial results for the fourth quarter and the fiscal year 2009. The fourth quarter revenue was $1.059 billion, up 1% from $1.048 billion in fourth quarter 2008 and the total year revenue was $2.95 billion, down 16% from $3.49 billion in 2008.

For the fourth quarter 2009 the Automotive/Mobile segment revenue decreased 2% to $812 million, Outdoor/Fitness segment revenue increased 24% to $149 million, the Aviation segment revenue decreased 4% to $64 million and the Marine segment increased 2% to $34 million.

During the fourth quarter the Operating margin improved to 27.6% compared to 22.6% in fourth quarter 2008; Diluted earnings per share increased 77% to $1.38 from $0.78 in fourth quarter 2008.

Automotive and Mobile division
In the quarter Garmin sold 3.9 million units, which was “driven by PND unit growth in both North America and Asia”, said the company. The Automotive/Mobile division saw 2% year‐over‐year revenue decline with 3% unit growth (in North America and Asia) offset by 6% ASP decline. Garmin said their market share was sequentially stable, meaning approximately 60% in the United States and around 20% in Europe. Therefore, the U.S. Company does not seem to have been impacted by TomTom’s deal with Walmart during Black Friday.

“Margins improved in the segment allowing for a 16% increase in operating income from $162.9 million in the fourth quarter of 2008 to $188.4 million in the fourth quarter of 2009. We recognize that this is a competitive, maturing market segment and are therefore predicting flat to slightly declining revenues for the PND category in 2010,” said Garmin Chairman Min Kao.

“Going forward we will focus our efforts on market share retention in the North American market, gaining market share in Europe through ongoing product innovation, and taking advantage of emerging markets in Eastern Europe, Asia, and Latin America. In addition, we will continue to concentrate on profitability in the segment as shown in our 2009 results”, he added.

Nuvifone
“while disappointed by sales of the nuvifone products to date, we are excited to be launching two next generation smartphones in the first half of 2010 and feel these devices will be well‐positioned in this competitive market,” said Min Kao.

Garmin executives are expecting slightly negative operating margin for the Nuvifone business in 2010 and looking at a possible break even at the end of the year. They have not shared their goal in terms of number of Nuvifone units to be shipped in 2010.

Auto/mobile outlook for 2010
For 2010 Garmin expects PND revenues to be flat to slightly declining. Additional revenue is expected to come from nüvifones and Auto OEM business as navigation penetration rate in cars increase. Although Garmin is not very optimistic with revenue in the Automotive and Mobile division between minus five percent and plus five percent in 2010. It forecast margins to decline 200 to 300 basis points.

Continued...