Garmin Reports 4% Revenue Decline, Higher Profit in 1Q 2013

Garmin Reports 4% Revenue Decline, Higher Profit in 1Q 2013
U.S. GPS maker Garmin announced today its financial earnings for the first quarter of 2013 with a revenue of $532 million, down 4 percent from $557 million in first quarter 2012.

The company shipped 2.5 million devices against 2.7 million in the year ago quarter, a 8 percent decline.

Operating margin for the overall business was 15 percent compared to 16 percent in the year-ago quarter.

Garmin maintained their financial outlook for the full year.

Outdoor segment
The outdoor segment revenue decreased 1 percent to $76 million. “Though this is a slow start to the year, we remain excited about the innovative products that we will offer throughout the year,“ said Garmin’s CEO Cliff Pemble.

Fitness business
Garmin’s fitness segment revenue increased 2% to $72 million. The performance compares with a very solid year ago quarter that saw strong initial shipments of the Forerunner 910XT and contributed to 26% growth in that quarter.

“Even with the difficult comparable, we were pleased to see the strong reception by the cycling community to our Edge 510 and 810 which began to ship in the quarter. In addition, consumers continue to gravitate to our Forerunner 10, capturing a new subset of the running market,“ explained Pemble.

Strong aviation performance
In the quarter Garmin’s aviation business increased 10% to $81 million. Garmin’s management explained that the OEM market contributed strong gains in the quarter. Segment revenues exceeded $80 million for the first time since 2008 when OEM production rates peaked.

“This is evidence of the strong market share gains that the aviation team has achieved. While excited to post such strong performance in the first quarter, we have much work ahead of us with numerous business jet certifications slated for completion in the months ahead.“, said Cliff Pemble.

Difficult marine business
Marine segment revenue decreased 10% to $50 million. According to Garmin, this was “due to several factors including the overall age of our product lineup, unfavorable weather conditions in the U.S., and ongoing macroeconomic uncertainties. In addition to decreased revenue, we experienced a significant reduction in gross margins as it became necessary to discount existing products to maintain market share.“
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Wednesday, May 1st 2013

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