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Garmin reports 2Q results

Garmin Ltd. today reported lower revenue and profits in the second quarter, but its results topped Wall Street estimates and the company said its 2013 guidance remains largely unchanged.

Garmin reported net income for the quarter that ended June 29 of $172.5 million, or 88 cents a share, down 7.2 percent from $185.9 million, or 95 cents a share, in the same period a year earlier. Revenue was $696.6 million, down 3 percent from $718.2 million in the year-earlier quarter.

The company said its traditional segments of outdoor, fitness, aviation and marine delivered 51 percent of total revenue and grew 8 percent from the year-earlier quarter.

The marine segment posted a 7 percent revenue gain, from $67.8 million in the second quarter last year to $72.8 million this year.

The growth was driven by the delivery of new products that had been delayed. They included the GPSMAP 8000 series glass helms and the 7-inch GPSMAP and echoMAP combination chart plotter and fishfinder, both of which Garmin said have been well received by the industry and are helping the company regain market share in the category.

“With new-product deliveries improving product mix in the second quarter, we returned to profitability in the segment, with gross and operating margins of 56 percent and 20 percent, respectively,” the company said in a statement.

“The second quarter of 2013 was highlighted by stronger-than-expected revenue performance across all segments,” Garmin president and CEO Cliff Pemble said in a statement.

“We were particularly pleased to generate revenue growth in each of our traditional markets. While our performance was strong in the second quarter and we believe that the outlook for growth in 2013 for the traditional markets is positive, we also anticipate that declines in the PND market will continue to be a significant headwind. The third quarter will be particularly challenging as we compare against a period of strong prior year sell-in driven by the timing of new-product introductions and end-of-life promotions. Given these factors, we are maintaining our full-year revenue and EPS guidance. Longer-term, our primary focus remains innovation that is expected to fuel sustained revenue and EPS growth.”

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