Garmin Earnings: Here’s Why Investors are Not Excited Now

Garmin Ltd. (NASDAQ:GRMN) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.80%.

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Garmin Ltd. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 11.11% to $0.4 in the quarter versus EPS of $0.45 in the year-earlier quarter.

Revenue: Decreased 4.42% to $532 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Garmin Ltd. reported adjusted EPS income of $0.4 per share. By that measure, the company missed the mean analyst estimate of $0.41. It beat the average revenue estimate of $518.64 million.

Quoting Management: “The first quarter of 2013 proved to be challenging, much as we had anticipated when providing guidance in February,” said Cliff Pemble, president and chief executive officer of Garmin Ltd. “Because we expected revenues to decline, we entered the year cognizant of the need to closely manage expenses which we accomplished. Both advertising and selling, general and administrative expenses declined year-over-year. Research and development expense increased as we remain committed to future innovation that can deliver long-term growth in both consumer and OEM markets.”

Key Stats (on next page)…

Revenue decreased 30.78% from $768.55 million in the previous quarter. EPS decreased 41.18% from $0.68 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.76 to a profit $0.68. For the current year, the average estimate has moved down from a profit of $2.8 to a profit of $2.4 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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