With a total revenue of $672 million, up 1 percent Garmin posted yesterday solid results for their third quarter 2012 driven by growth in the outdoor segment (golf, dog products) and flat revenue in their auto/mobile division (PND and automotive navigation).
Operating margin increased year-over-year to 24%, compared to 22% in third quarter 2011. The company generated $155 million of free cash flow in third quarter 2012.
“Due to the diverse markets that we serve, we were able to again post growth in revenue, unit volumes, and operating income during the third quarter of 2012,” said Dr. Min Kao, CEO of Garmin.
“Because of our third quarter results, we are raising our full year EPS guidance to $2.75-$2.90. We have continually strived to diversify our product portfolio across a wide variety of categories, as well as expand our geographic reach. By doing this, we have created opportunities for growth even when segments of our business face adverse market conditions. I am pleased with the continued strategic direction of the company and feel confident in our ability to achieve long-term sustained growth.“
Operating margin increased year-over-year to 24%, compared to 22% in third quarter 2011. The company generated $155 million of free cash flow in third quarter 2012.
“Due to the diverse markets that we serve, we were able to again post growth in revenue, unit volumes, and operating income during the third quarter of 2012,” said Dr. Min Kao, CEO of Garmin.
“Because of our third quarter results, we are raising our full year EPS guidance to $2.75-$2.90. We have continually strived to diversify our product portfolio across a wide variety of categories, as well as expand our geographic reach. By doing this, we have created opportunities for growth even when segments of our business face adverse market conditions. I am pleased with the continued strategic direction of the company and feel confident in our ability to achieve long-term sustained growth.“
Auto-Mobile Division
Garmin’s Automotive/Mobile segment revenue in the quarter was flat at $384 million.
The PND market share of the company was approximately 70% in the U.S. and over 32% in the major European markets.
“A slight decline in the PND business was offset by strong growth in our OEM revenues as we began to ship to Suzuki and saw improving volumes from Chrysler and Volkswagen.“ said Min Kao. “We believe that our PND volumes continue to trend ahead of the industry due to market share gains. The growth in OEM is exciting as we begin to see the results of our research and development investment. We will continue to invest in new opportunities for future growth.”
Garmin COO Cliff Pemble forecast 15 to 20% decrease for the overall PND market in 2013. Talking about the European PND market in an answer to a financial analyst, Cliff Pemble added “there are opportunities to gain (market) share from small (i.e. Mio) and bigger (i.e.TomTom) players as well.“
Outdoor
Outdoor segment revenue increased 11% to $105 million in the quarter. “Growth continued to be driven by our golf line-up, dog tracking and training, and our recently introduced fēnix (outdoor GPS watch),“ said Min Kao. With 46 percent operating margin this segment generated 30 percent of Garmin's total operating income in the quarter.
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Garmin’s Automotive/Mobile segment revenue in the quarter was flat at $384 million.
The PND market share of the company was approximately 70% in the U.S. and over 32% in the major European markets.
“A slight decline in the PND business was offset by strong growth in our OEM revenues as we began to ship to Suzuki and saw improving volumes from Chrysler and Volkswagen.“ said Min Kao. “We believe that our PND volumes continue to trend ahead of the industry due to market share gains. The growth in OEM is exciting as we begin to see the results of our research and development investment. We will continue to invest in new opportunities for future growth.”
Garmin COO Cliff Pemble forecast 15 to 20% decrease for the overall PND market in 2013. Talking about the European PND market in an answer to a financial analyst, Cliff Pemble added “there are opportunities to gain (market) share from small (i.e. Mio) and bigger (i.e.TomTom) players as well.“
Outdoor
Outdoor segment revenue increased 11% to $105 million in the quarter. “Growth continued to be driven by our golf line-up, dog tracking and training, and our recently introduced fēnix (outdoor GPS watch),“ said Min Kao. With 46 percent operating margin this segment generated 30 percent of Garmin's total operating income in the quarter.
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