Garmin Plunges After Q4 Results

Shares of Garmin GRMN, which manufactures and markets navigation devices, fell near a 52-week low on Wednesday after the company released its fiscal fourth-quarter earnings results. Both profits and sales declined during the period and Garmin's guidance for its fiscal 2013 financial results was below Wall Street consensus. Cliff Pemble, president and chief executive officer of Garmin said, "Though business trends decelerated in the fourth quarter, we remain focused on new product development and market share gains to offset the secular declines in the PND industry and the continued generation of long-term shareholder value." The company reported Q4 net income of $129.29 million or $0.66 per share, compared to $165.56 million or $0.85 per share, in last year's fourth-quarter. On an adjusted basis, which is comparable to analysts' consensus, Garmin reported net income of $132.55 million or $0.68 per share, versus $187.49 million or $0.96 per share, last year. This missed Wall Street analysts' consensus EPS estimates of $0.73. Net sales in the quarter were down 16 percent to $768.55 million from $909.64 million in last year's fourth-quarter. This also missed consensus estimates of $833.43 million. Gross margins in the period actually rose despite the disappointing results. Gross margin went to 49 percent from 48 percent. The only segment at Garmin that saw a sales increase in the period was fitness, which rose 10 percent to $104 million. The Automotive/Mobile segment recorded a 25 percent decline in revenue to $437 million. The outdoor segment saw revenue fall 2 percent to $119 million while aviation segment sales also declined 2 percent to $70 million. The Marine segment registered a decline of 9 percent to $39 million. Looking ahead to fiscal 2013, Garmin said that it sees adjusted earnings per share of $2.30 to $2.40 on revenue of $2.5 billion to $2.6 billion. This compares to current consensus EPS estimates of $2.82 on revenue of $2.76 billion. The company's board of directors announced a share repurchase authorization of up to $300 million through December 31, 2014. During Wednesday's trading session, GMRN was down more than 9 percent heading into the final hour of the day. The stock was sitting at $35.58 compared to a 52-week low of $34.65.