Garmin Q4 Earnings: Wearables and Adventure Watches Drive Growth, 20% Dividend Hike, Stock Soars

On Wednesday, Garmin Ltd GRMN reported fiscal fourth-quarter 2024 revenue growth of 23% year-on-year to $1.82 billion, beating the analyst consensus estimate of $1.70 billion. 

The GPS navigation and wearable technology company’s proforma EPS of $2.41 beat the analyst consensus estimate of $2.03. The stock gained after the report.

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Segments: Revenue from Fitness grew by 31% year over year to $539.31 million, led by growth in wearables. Outdoor revenue increased by 29% year over year to $629.37 million, primarily due to growth in adventure watches.

Aviation revenue rose 9% year over year at $236.88 million, driven by the OEM and aftermarket product categories. Marine revenue increased by 5% year over year to $251.26 million, with growth across multiple categories. Auto OEM grew 30% Y/Y to $165.75 million, primarily driven by growth in domain controllers.

The gross margin increased 100 bps to 59.3%, and the operating margin climbed to 28.3% from 23.0% a year ago.

Garmin generated $399.2 million in free cash flow for the quarter, compared to $417.3 million a year ago. As of December 28, 2024, it held $3.7 billion in cash and equivalents.

Dividend: The board plans to propose an annual dividend hike of 20% to $3.60 per share ($0.90 per share payable quarterly).

FY25 Outlook: Garmin expects revenue of $6.80 billion versus the consensus of $6.72 billion. It expects a proforma EPS of $7.80 against the consensus of $7.74. 

Garmin stock surged 75% in the last 12 months as it has beaten analyst consensus estimates, at least for the preceding six quarters.

Price Action: GRMN stock is up 9.65% at $235.50 premarket at the last check on Wednesday.

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