The double-digit growth figures with slightly increased margins are very impressive.
Shares rose 2% today, although so did the NASDAQ. So I’d imagine that these results are in line with company guidance and with market expectations.
Garmin cite, below, the Vivosmart,Vivofit, Instinct and Spotify on the Fenix 5 Plus and that must be a ‘bit-of-a-worry’ to the competition as those products haven’t yet had the full positive impact on sales/profits that they eventually will.
Take-out: If I had Garmin shares, I’d be holding on to them right now.
—- Press Release ————
SCHAFFHAUSEN, Switzerland–(BUSINESS WIRE)–Garmin Ltd. (Nasdaq: GRMN – News) today announced results for the third quarter ended September 29, 2018.
Highlights for the third quarter 2018 include:
- Total revenue of $810 million, growing 8% over the prior year, with marine, aviation, fitness and outdoor collectively growing 16% over the prior year quarter and contributing 80% of total revenue
- Gross margin of 59.4% compared to 58.2% in the prior year quarter
- Operating margin of 24.2% compared to 23.1% in the prior year quarter
- Operating income was $196 million, growing 13% over the prior year quarter
- GAAP EPS was $0.97 and pro forma EPS(1) was $1.00
- Shipped the 200 millionth product within the quarter, a testament to our ability to design, manufacture, and sell unique applications of technology for active lifestyles
- Opened the first phase of our Olathe campus expansion more than doubling our aviation product manufacturing capacity
- Announced the acquisition of FltPlan.com, a leading electronic flight planning and services provider, expanding our ability to offer premium flight services to our customers
“During the third quarter, we continued our strong performance achieving double-digit revenue growth in four of our five segments and double-digit growth of consolidated operating income,” said Cliff Pemble, president and chief executive officer of Garmin Ltd. “We are well positioned for the remainder of 2018 with a solid lineup of products and are raising our EPS guidance to reflect our strong performance.”
The fitness segment posted strong revenue growth of 14% primarily driven by strength in wearables. Gross and operating margins were 54% and 20%, respectively, resulting in operating income growth of 12%. During the third quarter, we launched the vívosmart® 4, a smart activity tracker that introduces a wrist-based pulse ox sensor in a slim design, new advanced sleep monitoring and the innovative Body Battery, which monitors individual energy levels. We also announced new vívofit® jr. 2 interactive adventures and bands featuring Disney Princess and Marvel’s Spider-Man. We continue to pursue opportunities for wearables and cycling within the fitness segment.
During the third quarter of 2018, the outdoor segment grew 13% driven primarily by wearable devices. Gross margin improved year-over-year to 65%, while operating margin improved to 38% resulting in a 16% increase in operating income. We recently announced the integration of Spotify on the fēnix® 5 Plus series, giving customers the ability to listen to offline music playlists from their wrist. We also recently introduced Instinct®, a GPS smartwatch that is rugged and reliable. Looking forward, we remain focused on opportunities in wearables and other product categories within the outdoor segment.