Παρασκευή 22 Φεβρουαρίου 2013

Garmin 4Q Revenue Hit by PND Market Decline

Garmin today posted weaker-than-expected revenue and profit in their fourth quarter and full year 2012 earnings. Revenue for Garmin’s automotive and mobile division - which encompasses its Personal Navigation Device business - fell 25%.

Garmin’s revenue for the full year 2012 declined 2% to $2.72 billion. In 2012 Garmin sold a total of 15.4 million units “with growth in outdoor, fitness, and automotive OEM, largely offsetting decliens in personal navigation devices.“       For 2013 Garmin’s executive team established their revenue guidance to $2.5 to $2.6 billion. They forecast that their growing revenue in the outdoor, fitness, marine and aviation segments are not going to be large enough to offset the expected declines in the PND market.

Automotive /Mobile segment
During the fourth quarter 2012 the automotive /Mobile segment revenue decreased 25% to $437 million. As explained by TomTom during their financial earnings last week , the U.S. PND market has lost its seasonality, i.e. in previous years the fourth quarter represented a large chunk of the year’s business.     
 Outdoor Segment
the outdoor segment posted a slight revenue decline (2%) to $119 million in the fourth quarter but this compared to an exceptional 4Q/2011 when growth was 35%. For the full year the segment grew 11% and contributed $165 million of operating income.    
  Fitness division
the fitness segment revenue increased 10% to $104 million in the fourth quarter 2012.

“Growth in the segment fell slightly short of our full year expectations due to product delays but strong fourth quarter results point to ongoing growth opportunities within the category (...). The Forerunner 10 was a popular holiday gift and we expect the momentum from that product to continue in 2013,“ added Garmin.      
Aviation
Garmin’s aviation business decreased 2% in the fourth quarter to $70 million, but increased 2% on a full year basis ($292 million) contributing $73 million of full year operating income
Marine
In the marine business both the fourth quarter (down 9% to $39 million) to and the full year (down 6% to $208 million) have been tough for Garmin on a market that does not show signs of recovery in the short term.

Garmin however foresees a real opportunity on that market in the future: “We have continued to invest heavily in research and development for our marine segment causing a significant decline in operating margins and profits. New chartplotters, fishfinders and a marine focused watch are a result of this investment and shuold allow us to return to revenue growth in 2013.“

Garmin also indicated that the Board of Directors authorized the company to repurchase up to $300 milllion of the company’s shares. Garmin has indeed geenrated over $646 million of free cash flow in 2012, leading to a total balance of $2.9 billion.

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