Garmin Locates Huge Earnings up 70%

Garmin Ltd. GRMN, provider of navigation, communication and information devices, blew street estimates away reporting second-quarter earnings surged 70 percent. Net income rose to $185.9 million, or 95 cents a share, far exceeding the previous year's $109.5 million or 56 cents a share for the same period. Excluding one time items Garmin earned 98 cents a share versus 68 cents a year earlier. Analysts were looking for 67 cents per share. The company raised its full-year view to $2.70 to $2.85 a share up from previous estimates of $2.45 to $2.60 per share. If also raised its full year guidance to $2.75 million from previous estimates of $2.70 million. With sales jumping 6.5 percent to $718.2 million, earlier critics of Garmin's impending death march have been proven wrong again. With the escalation in smartphones providing sophisticated GPS and mapping applications, Garmin is faced with a challenging uphill fight. However, the automotive and mobile segment posted an 8% increase to $392 million. The stock has performed admirably in the past year up over 20 percent. Increases in both the outdoor sector (up 24 percent to $100 million) and the aviation segment (up 4 percent to $76 million) were contributing factors in Garmin's advance. The high demand for outdoor and fitness products such as watches, GPS sensors, and golf accessories that provide preloaded golf course applications have been a driving force in the company's growing revenue. Competitor Trimble Navigation Ltd. TRMB lat week announced it would supply GNSS receivers for the Japanese Geonet Network, have provided stiff competition for Garmin, along with Motorola Solutions Inc. MSI. Look for a pop in the navigation device and navigation software providers, however this still remains a very challenging segment and gains will be short lived. In the consumer GPS segment look for consumers to continue to tighten their belts. However there could be room for growth through government contracts worldwide. Obviously this makes this a stock pickers market and trading as a group is ill advised.