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Garmin reports 2Q results

Garmin today announced a 9 percent increase in total revenue and a 23 percent increase in marine segment revenue for the second quarter.

Total revenue for the quarter that ended June 26 was $729 million, up from $669 million in second-quarter 2009, with all segments posting growth. Marine segment revenue was $74 million, the company said.

Garmin's net income fell to $134.8 million, or 67 cents a share, from $161.9 million, or 81 cents a share, in the same quarter last year.

For the year to date, total revenue of $1.16 billion was reported, up 5 percent from $1.11 billion year-to-date in 2009. For this same period, marine segment revenue increased 18 percent, to $116 million.

Garmin posted strong gross margins of 54 percent, as the total company average selling price increased slightly. The company sold 4 million units in the second quarter of 2010, with unit growth in all business segments and all geographies.

"In the second quarter, we delivered strong results, including revenue growth of 9 percent, unit growth of 8 percent and pro forma [earnings per share] growth of 2 percent, which provides a solid foundation as we enter the back half of 2010," Min Kao, chairman and CEO of Garmin, said in a statement. "Based on our performance in the second quarter, we expect to deliver on our full-year guidance for pro forma earnings per share. The growth in our outdoor/fitness and marine segments made a significant contribution to the quarter and we plan to build on that momentum.

"The marine segment posted revenue growth of 23 percent, as we took advantage of the continued recovery in the industry. We believe we are outperforming the market and gaining share on the strength of our chart plotters and networked solutions," Kao added. "The significant margin expansion both sequentially and year-over-year speaks to our strong execution in the segment. As we look toward the back half of the year, we are excited to continue to grow our OEM customer base with wins such as our recently announced partnership with Bayliner. As announced in July, Bayliner, a world leader in affordablypriced runabouts and cruisers, will be utilizing Garmin marine electronics in all navigation packages in the upcoming 2011 model year."

Garmin said it expects revenue in 2010 of $2.8 billion to $3 billion, with the slight reduction driven primarily by unfavorable foreign exchange movements, as well as a slight reduction in the automotive/mobile segment.

"While slightly reducing our revenue range, we are maintaining our previous [earnings per share] range due to the strong margins in the first half of 2010," the company said. "We anticipate both gross and operating margins to decline from the excellent margins generated in 2009, but at a much slower rate than had been earlier anticipated."

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