Garmin Third Quarter Earnings Sneak Peek

Garmin Ltd. (NASDAQ:GRMN) will unveil its latest earnings on Wednesday, October 31, 2012. Garmin and its subsidiaries manufacture, market, and distribute Global Positioning System-enabled products and other related products.

Garmin Ltd. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 61 cents per share, a decline of 20.8% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 64 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 61 cents during the last month. For the year, analysts are projecting profit of $2.87 per share, a rise of 7.5% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 28 cents, coming in at net income of 95 cents a share versus the estimate of profit of 67 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit rose 69.8% to $185.9 million (95 cents a share) from $109.5 million (56 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 6.5% to $718.2 million from $674.1 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.64 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.95 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 51.7% to $902 million while assets rose 1.4% to $2.38 billion.

Stock Price Performance: Between September 27, 2012 and October 25, 2012, the stock price dropped $2.73 (-6.5%), from $41.99 to $39.26. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 3.1% (-$1.12) over that span. The stock price saw one of its best stretches over the last year between March 20, 2012 and March 27, 2012, when shares rose for six straight days, increasing 1.7% (+81 cents) over that span.

Key Stats:

On the top line, the company is looking to build on three-straight revenue increases heading into this earnings announcement. Revenue increased 8.6% in the fourth quarter of the last fiscal year and 9.6% in the first quarter before climbing again in the second quarter.

Analyst Ratings: With five analysts rating the stock as a buy, one rating it as a sell and five rating it as a hold, there are indications of a bullish outlook.

Wall St. Revenue Expectations: Analysts predict a decline of 0.9% in revenue from the year-earlier quarter to $660.9 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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