Garmin reports 3Q results

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Garmin Ltd. today announced stronger-than-expected revenue for the third quarter, leading the company to raise its earnings-per-share guidance for the full year to $2.40 to $2.45 from $2.30 to $2.40.

Revenue was $644 million for the quarter that ended Sept. 28, with outdoor, fitness, aviation and marine delivering 50 percent of total revenue and growing 12 percent from the same period last year. Total revenue for the quarter last year was $672.4 million.

Net income for the quarter was $187.7 million, or 96 cents a diluted share, up from $140.4 million, or 72 cents a share, in the 2012 quarter.

The marine segment posted revenue growth of 24 percent, driven primarily by strong demand for chart plotters. Garmin said competitive pricing in marine electronics has put pressure on the company’s gross margins.

“This is a challenging industry dynamic, but we managed operating expenses effectively in the quarter, allowing us to generate operating income,” Garmin said in a statement. “We will continue to focus on innovation that will drive market share gains while closely managing costs to improve long-term profitability.”

“Stronger-than-expected revenue performance continued in the third quarter, with fitness and marine delivering exceptional growth,” Garmin president and CEO Cliff Pemble said in the statement. “In addition, the gross and operating margins were strong as we effectively controlled operating expenses.”

Total operating expenses in the quarter were $201 million, a 1 percent increase from the prior year.

Decreased spending in advertising was driven primarily by lower cooperative advertising, which is directly related to sales. This was offset by growing research and development investment in each segment, while selling, general and administrative expenses were constant.

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