Earnings Announcements

November 3, 2010

Garmin Earnings; Off 11% Year over Year - Promising Fitness, Outdoor GPS Results

Garmin released their earnings today and revenue is off by about 11% versus year ago, mainly on the back of lower volume sales. They also announced that they are killing the disappointing Garmin Nuvifone; the Garmin Asus smartphone entry and re-deploying R&D resources from that team to other teams in accordance with market demands.

App Development - Garmin also mentioned that some of those resources from the phone area are being deployed to the App space, but cautioned that the space is a "tough area" and that they want to be "conservative" with their investment.

Tough Margins - While margins are solid on the Outdoor and Fitness segments, the margins on the automotive segment continue to be tough with historically lower margins due to the tough competition. the outdoor and Fitness areas continue to be a bright spot in terms of growth for Garmin.

To sum up the segments:

  • Automotive/Mobile segment revenue decreased 19% to $442 million
  • Outdoor/Fitness segment revenue increased 9% to $144 million
  • Aviation segment revenue increased 4% to $60 million
  • Marine segment revenue increased 1% to $46 million

Geographically, Asia continued to contribute growth in third quarter 2010 while North America and Europe declined:

  • North America revenue was $413 million compared to $503 million, down 18%
  • Europe revenue was $216 million compared to $237 million, down 9%
  • Asia revenue was $63 million compared to $41 million, up 54%

In looking for clues to the future, Garmin realizes that in their segments they have needed to go down market to reach the lower selling prices with new units. That's why we have seen lower priced units in Gold (The new Approach S1), and the fitness market where lower priced Forerunners have recently hit the market. They also are happy with their outdoor and fitness segments.

Garmin continues to see lower average selling prices in the Auto PND/GPS segment, dropping about 10% a year. This holiday season they cited that "low cost" (to them) deals will be available. This is not a surprise, as they tend to offer solid discounts while saying away from craziness in the holiday season.

We live tweeted the Garmin Conf Call. Follow us on Twitter to get more on GPSLodge.

Full Press release after the jump.......

ArrowContinue reading: "Garmin Earnings; Off 11% Year over Year - Promising Fitness, Outdoor GPS Results"

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August 4, 2010

Garmin Earnings at Record Level Sales Up - Flat Outlook


Garmin had what amounts to a pretty good quarter with all product segments achieving growth on some level - off from the teeth rattling growth of years past, but pretty good considering the weak economy, the surge of mobile phone based navigation and determined competition. While the auto segment sales were only up 2%, the Outdoor Fitness area was up 32% behind strong promotion this past quarter of the older Forerunner 305, and the newer models of the Forerunner including the Forerunner 405, Forerunner 110, as well as the Edge 500.   

Geographically sales in the established markets of the US and Europe were not the hot spots with revenue up 4% and 14% respectively, whereas sales in Asia were up 37%; too bad that represents less than 10% of their business. Finally sales on a unit basis were up 8%.

Garmin lowered their outlook for the rest of the year citing currency exchange factors and a lowered automobile segment forecast. The latter partially driven by the continued lowering of prices in that segment by about 5% - 10%.

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July 22, 2010

TomTom Net Earnings Up; Sales Revenue Down


TomTom reported earnings and they are up 69% vs year ago; not bad coming off a big recession when people had a death grip on their wallets. The bad news is that the market is definitely shifting as they are keeping their expectations for the coming year in line with what they just saw - as in not much growth if anything.

So while they reported a 69% growth in profit, they also reported a sales decline of 2% overall. The improved profit picture was as a result of lower finance costs; presumably of the debt they took on to buy TeleAtlas. They also aid back nearly a billion dollars in loans to help their finances.

Shares of the PND market are up for TomTom in both the European market (44% up to 49% vs. Year ago), and in North America (19% up to 23% vs. year ago) in the second quarter.

A couple of interesting tidbits:

  • TomTom signed a deal with Twitter to "Make its tweets more location relevant by basing its Twitter Places service on TomTom's Points of Interest."
  • TomTom WORK, the service that allows for some centralized control of GPS units for small businesses grew its subscriber base by 42% in the quarter compared to the same quarter last year to 115,000. That's a pretty good increase in a down market. Seems like small businesses are trying to squeeze more productivity out of their existing fleets with this service.
  • TomTom's HD traffic was recognized by in a German study by TUV SUD for its "superior quality" indicating that it had better quality and coverage; besting the second placed traffic information service by 50% in the accuracy measure.
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August 6, 2009

Garmin Earnings Down; Share Up 30+% on better than Expected Earnings

Maybe things are better than expected for the economy? Garmin's sales were off 30% vs. year ago, as it's key segments were all down in sales, and its earnings were down 32% to $0.81 per share.... so why the stock jump? Apparently Wall St. consensus was for earnings of $0.51 per share and that's a lot better than expected. The market is still tough, and I am sure that Garmin is working hard to make sure that the promotions go off well, the inventories are managed well and prices are as low as possible to keep the product moving. Wall St. rewarded the over delivery by moving the Garmin stock; it closed at about $27 before the news and opened above $33 after the news.

CEO Min Kao said:

"While the macroeconomic conditions continue to dampen consumer demand, we are encouraged by the 53% sequential improvement in revenues in the second quarter.  We are also pleased with the solid margins and earnings in the quarter achieved by the various initiatives that we have taken to improve productivity, reduce expenses and utilize the strength of our balance sheet.      

The automotive/mobile segment continued to show sell‐through growth on a unit basis in both the North American and Asian markets and Garmin maintained its strong global market leadership position.   The sequential improvement in pricing and margins in the quarter were on target with our expectations entering the quarter.  We intend to continue to position ourselves to take advantage of the ongoing demand for portable navigation devices by delivering innovative solutions to the consumer.  Our recently introduced 1200, 1300 and 1400 nüvi®series which offer affordable navigation solutions in a sleek form factor with pedestrian capabilities have been well received, and we continue to expand the utility of in‐vehicle navigation through the introduction of our first product designed specifically for the trucking market.

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February 24, 2009

TomTom Reports a Loss, Writes Down TeleAtlas


TomTom announced some bad news today as they offered a loss and a write-down on the TeleAtlas acquisition. TomTom lost 989 Million Euros in the last quarter compared to a profit of 107 Million Euros a year earlier. This was on the back of a 17% loss in topline sales in the quarter, apparently in line with earnings estimates. They also wrote off about a billion Euros from teh value of the TeleAtlas acquisition, while admitting that they overpaid for the map maker.

As TomTom moves forward, they indicated that their HD launch has been going well, with about 25% of their HD Traffic customers renewing their subscriptions after a year's time. That is not bad, but I would have hoped for a higher rate. It all depends on what their financial models say, but once you have the purchase made, one would hope to keep that person as a customer. TomTom indicated that they are going to be working on more services sales this year, maybe they are thinking the same thing. Reportedly they have 130,000 customers.

TomTom also commented on the fact that they believe that they are going to comply with their loan agreements, but it sounds like if the market deteriorates more, they could see an issue moving forward with that debt load.

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Garmin Net off 49%; Retail Inventory Down


Garmin announced earnings and said that while their net was off 49%, and their topline sales down 14% on a 17% sales drop in the automotive segment. While that might sound terrible, it is pretty good considering the world is falling apart for some companies. The outdoor/fitness segment was off just 5% as was the aviation segment. The marine segment showed flat sales. While North America was off 9%, Asia was off 17% and Europe was off 26%.

CEO Min Kao said,"A significant highlight for 2008 is our gross margin performance of 44.5% which is down just 150 basis points from 2007. We also achieved a strong operating margin of 24.7% which exceeded our earlier expectations. Throughout 2008, we maintained our strong cash position with free cash flow generation of $743 million which was enhanced by the significant reduction in inventory during the quarter. This cash flow allowed us to fund our stock repurchase plan, pay a $0.75 per share dividend, and remain a debt‐free company. "

They also indicated that the bloated inventories present after the holidays in the retail channel, appear to be dropping which is a good thing for Garmin as they will start to move more GPS units into the stores for spring selling events.

the Specific Press Release can be found at the Garmin Website

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August 2, 2008

Garmin Sales and Earnings Up

Garmin dropped some good news and some not so good news this week. The Good news was that their earnings are still up despite the poor economy, and lackluster sales on a whole range of things at the stores these days. The bad news is that lowered expectations for the year citing macroeconomic issues.

The big winners were in a few segments:

  • Auto Revenue - up 24%
  • Outdoor/Fitness Revenue up 54% on the back of a successful Forerunner 405 and Edge 605/705 launch
  • North American Revenue up 27%
  • European Revenue up 19%
  • From CEO Min Kao:

"Despite the challenging macro economic conditions, Garmin experienced another quarter of growth in 2008 and continues to demonstrate our solid leadership position in the industry. Our strength in the automotive/mobile segment in the face of a slowing economy demonstrated that our products continue to be well-positioned to take advantage of the ongoing demand for portable navigation devices. The latest nüvi 2x5 products delivered during the second quarter provide yet more features for cost-conscious consumers including picture navigation and compatibility with MSN Direct's real time content service. We also delivered the high-end nüvi 800 series in the second quarter which offers industry-leading speech recognition in the personal navigation sector. Our nüvi product offerings continue to support our strategy of extensive market segmentation, drawing in customers with compelling, competitive features, and useful content integrated into easy-to-use products at many attractive price points. We believe this approach will continue to garner growing market share and drive strong results throughout the remainder of 2008. Although we continue to earn industry-leading market share, the sector is not growing as rapidly as earlier anticipated and consumers appear to be more cost-conscious than ever; therefore, we will be lowering our full year revenue growth expectations."

Full Press Release can be found here at the Garmin Site

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April 30, 2008

Garmin Earning Up 35%; Stock Down

These are some crazy times; Garmin's earnings were up against last year, but not up enough for the stock market to feel comfortable, and as a result, Garmin's stock lost a few bucks after teh earnings announcement. To be clear, the earnings were the best Garmin ever had, and sales are up 35% overall, with 43% increase in automotive sales, 30% in Marine sales, 19% increase in Aviation sales, and a 16% increase in Fitness/Outdoor sales. Garmin also cited their strategy of distributor acquisition in Europe as a main reason for gaining sales there.

The problems come when Wall Street expected more from them, and from the fact that operating margins shrank, meaning that prices are shrinking faster than costs versus a year ago.

CEO Min Kao said
"We are pleased with our performance in the first quarter, particularly given the general slowdown in the global economy. Demand for our automotive/mobile products continued beyond the traditionally strong fourth quarter holiday season, with another quarter of robust triple-digit growth. While the first quarter is typically our slowest quarter, we were
nonetheless able to achieve healthy growth in each of our business segments and each geographic area."

Read the full press release (pdf)

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April 23, 2008

TomTom Earnings Off


TomTom reported earnings for the first quarter of 2008, and it was not as good a quarter this year due to significant price pressure on the well known GPS maker. So, apparently TomTom didn't grow revenue this past quarter like they have in the past. Tough competition and the tough economy has to be impacting sales of consumer electronics like this, with discretionary spending under pressure. I guess if you can't afford a tank of gas, let alone a new widescreen GPS.

Overall revenue was 264M Euros vs. 296M Euros last year, while US revenue was up 133% to 85 Million Euros.

"Retailers in Europe slashed personal navigation device inventory during the first quarter," said Dresdner Kleinwort analyst Ulrich Rathe, "leading to a massive 30% decline in sales in that geography." For the company as a whole, sales fell 10.8% in the first quarter.

TomTom's average retail price was down 42.6% to about $185, from $324 a year earlier. A quick check back in my archives had the TomTom ONE selling for $290 in March 2007, while it is frequently seen for $139 - $149 these days, and the TomTom GO 910 was at $439, while the TomTom GO 920 is selling in the mid-to upper $300's today. The price drops are dramatic, and the effect is that the big guys aren't making as much money, but they are keeping the low cost competition at bay as they are having a tough time achieving critical mass.

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March 18, 2008

GPS Market in US Explodes in Q4

GPS World Magazine has a good write-up on the GPS market, its developments and some of the critical numbers coming off the big fourth quarter in 2007 which saw cheap GPS deals at every major Black Friday player, and out of stocks online for days as people scrambled to get one of the hottest gifts of the year. While total year shipments jumped 148%, Q4 shipments jumped over 400%. While that's a lot, and there were 6.7 million sold in Q4, there's still plenty of people without one. A couple of key points below, check out the whole article for more information on the US market and the growth in the Asian Pacific markets as well.

Canalys estimates that around 6.7 million PNDs shipped in the United States in Q4, representing 55 percent of the total for the year. In Q4 2006 the figure was below 1.5 million, showing just how much the market has grown and the extent to which the United States, once tiny compared to the European market for such devices, has become a major arena for the many competitors in this industry, Canalys observed.

Looking at the market for all mobile GPS navigation devices (which includes smart phones that have integrated GPS and an activated on-board solution), Canalys puts market leader Garmin's share in the United States in Q4 at 47 percent, almost exactly where it was a year earlier. Garmin is followed by TomTom at 21 percent Magellan at 17 percent and then Mio Technology at 6 percent -- the top four hardware vendors have more than 90 percent of the market. A year earlier they had 80 percent between them.

Via GPS World

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February 27, 2008

TomTom Earnings - Sales up, Prices Down

TomTom reported earnings and as you would expect out of a GPS maker riding the wave of a surging category the sales were way up; up 123% in unit sales year over year for the quarter, with sales up 33%. Not bad, as they retained a high market share in Europe - 49% in the fourth quarter and achieved a 27% share in the US. All wrapped up in this is a declining average sales price, resulting in a market share push.

While the sales are way up, the investment community got spooked on the reports that margins are getting squeezed as the prices are dropped. With those lower prices, TomTom is expecting to see the GPS market at 38 million units, up from 25 million units in 2007; a 50% growth rate. I'll bet a lot of industries would love to have a 50% growth rate......

They also recently mentioned that hey are having a press conference at CeBit this coming week where they will undoubtedly announce new models.


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February 20, 2008

Garmin Profit Jumps


Garmin's sales for the 4th quarter were up 99% versus year ago to $1.2Billion in the quarter. That's too bad, they were up 100% last year; missed it by that much...... Anyway, earnings were also up 70% to $1.39 per share. Things were up all over the place as sales grew significantly in their Automotive, outdoor/fitness, aviation and marine. Growth was seen in all geographies too.

Wall St hit them a bit after the announcement as the street is a little concerned over the decline in selling prices. I have noticed that Garmin used to carry a premium price over TomTom on many models, but are now undercutting them on some models. It is certainly a more aggressive market out there as people are fighting for their share of the explosive growth. Expect TomTom Earnings out in a few days...

Garmin also mentioned that they expect retail prices to drop by 20% this year; not sure if that means a drop across the board, or average price when you include the new high end units that have yet to hit the market. But to me a 20% drop on a $260 Nuvi 350 means a Nuvi 350 that is around $199 for the holidays.

Dr. Min Kao, Chairman and Chief Executive Officer said, "Garmin experienced an exciting fourth quarter, which brought a strong finish to fiscal 2007. The strong holiday season demand we experienced clearly demonstrated that our products are well-positioned to take advantage of the growing interest in portable navigation devices. Independent market research indicates we have maintained a strong leadership position in North America, and our market position in Europe continues to improve as well."

Press Release is below....

ArrowContinue reading: "Garmin Profit Jumps"

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February 5, 2008

SiRF Earnings DOWN 89%


It appears that SiRF has run into pricing pressure. With prices dropping like a stone on the GPS front, and some GPS makers electing to go with other "High Sensitivity Receivers", that are pretty good in my opinion (think TomTom and Garmin). Anyway, SiRF's profits dropped 89%, and today their stock dropped by over 50%. Not good news.

Scott Martin at Permalink | Comments (0) | social bookmarking

November 2, 2007

NAVTEQ Earnings up 47%

NAVTEQ announced solid earnings growth related to the strong performance of GPS system growth. Sales were up 51% to $214.8 million, and net earnings were up 47% versus year ago. Big jumps for the map maker that supplies maps to Garmin and others. Recall that Nokia has announced plans to acquire NAVTEQ while Garmin and TomTom appear to be in a bidding war for the smaller and less profitable rival, TeleAtlas.

Always interesting; stay tuned.

Scott Martin at Permalink | Comments (0) | social bookmarking

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