Garmin reports 1Q results

Garmin Ltd. reported first-quarter revenue of $585 million, with fitness, outdoor, aviation and marine delivering 63 percent of total revenue.
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Garmin Ltd. reported first-quarter revenue of $585 million, with fitness, outdoor, aviation and marine delivering 63 percent of total revenue and collectively growing 9 percent from the quarter last year.

Gross margin improved from the prior year to 59 percent and the operating margin remained at 19 percent.

Overall revenue at Garmin was nearly flat, compared with $583.2 million in the quarter last year, and the company reported a lower profit. Garmin said its profit for the quarter that ended March 28 was $66.8 million, or 35 cents a diluted share, compared with $118.8 million, or 61 cents a share, in the quarter last year.

The marine segment posted revenue growth of 7 percent in the quarter this year after significant growth of 19 percent in the quarter last year. The company expects growth in marine to accelerate in the second quarter because of a strong order backlog for recently introduced products that have proved popular.

Gross margins in the marine segment improved year-over-year to 55 percent in the quarter, with the product mix shifting toward new products with less discounting and higher margin profiles. Operating margin also improved in marine, generating operating income growth of 20 percent.

The company said it will stay focused on innovation and product portfolio expansion that seeks to generate market share gains and growing profits throughout 2015.

“We were able to deliver solid operating results and consistent pro forma EPS in the first quarter despite the negative impact of a stronger U.S. dollar, compared to other major currencies,” Garmin president and CEO Cliff Pemble said in a statement.

“These results highlight our ability to capitalize on growth opportunities in the near term while still investing in our market share position and long-term product road map through increased advertising and research-and-development expense. These investments are expected to generate ongoing growth potential in 2015 and future years.”

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