Garmin Ltd. (Nasdaq: GRMN) – Q1 FY 2011 Earnings Preview
Tuesday, May 03, 2011 4:06 PM

Garmin Ltd. (Nasdaq: GRMN) is scheduled to report its first quarter FY 2011 on May 4th 2011 at 10:30 a.m. EST. The company's reported EPS for the last two quarters missed analysts' consensus estimates by margins of 5.70 percent and 6.70 percent. Garmin is a provider of navigation, communication and information devices and applications enabled by global positioning system (GPS) technology. In September 2010, the company acquired MetriGear Inc. In October 2010, the company acquired Belanor AS.

For Q4 FY 2010:

  • Garmin reported revenue of $838 million, down 21 percent, compared with revenue of $1.05 billion in the fourth quarter FY 2009.
  • Operating margin declined to 22 percent compared with 28 percent in the same quarter last fiscal year.
  • Net income declined 44 percent to $161 million, or $0.83 per diluted share, compared with net income of $288 million, or $1.38 per diluted share, in the fourth quarter FY 2009.
  • Earnings missed analysts' consensus estimate of $0.88 per share for the fourth quarter FY 2010.

For full year 2010, total revenue reported was $2.69 billion, down 9 percent from $2.95 billion in FY 2009. However, gross margin increased to 50 percent compared with 49 percent in FY 2009. Operating margin declined to 24 percent from 27 percent in 2009. Net income for the year was $560 million, or $2.83 per diluted share, down 21 percent, compared with $709 million, or $3.53 per diluted share, in FY 2009.

During the first quarter, Garmin signed a letter of intent for the proposed acquisition of Garmin Distribution Africa Ltd, the distributor of Garmin's automotive, outdoor recreation, fitness and marine products in Southern Africa. After the acquisition is completed, the company will be renamed Garmin Southern Africa Ltd. and will continue operations at its current headquarters and warehouse facility located near Johannesburg, which employs approximately 70 associates. The acquisition is expected to be completed in June 2011.  Financial terms of the transaction were not released.

For the first quarter, analysts' EPS estimates range from a low of $0.21 to a high of $0.40 per share, compared with consensus estimate of $0.33 per share to $0.38 per share in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $366 million to a high of $459.32 million, compared with a consensus estimate of $413.09 million or $431.07 million in the same quarter a year ago. For the quarter ended March, 2011, the consensus EPS forecast has remained unchanged for the last 60 days.

The last trading price was $34.01, down 0.22 points, or 0.64 percent on Tuesday. During the first quarter, analysts at brokerage firm Stifel Nicolaus upgraded the stock rating to hold from sell.



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