Post Earnings Coverage as Garmin’s Quarterly GAAP EPS More than Doubled

Upcoming AWS Coverage on Cubic Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 22, 2017 / Active Wall St. announces its post-earnings coverage on Garmin Ltd (NASDAQ: GRMN). The Company released its first quarter fiscal 2017 financial results on May 3, 2017. The maker of personal navigation devices exceeded top and bottom-line expectations and also reiterated its outlook for FY17. Register with us now for your free membership at:

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One of Garmin’s competitors within the Scientific & Technical Instruments space, Cubic Corp. (NYSE: CUB), reported on May 08, 2017, its financial results for the quarter and six months ended March 31, 2017. AWS will be initiating a research report on Cubic in the coming days.

Today, AWS is promoting its earnings coverage on GRMN; touching on CUB. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended April 01, 2017, Garmin reported total revenue of $638.55 million, up 2% compared to revenue of $624.04 million in Q1 FY16, with marine, outdoor, aviation, and fitness collectively growing 12% over the prior year’s quarter and contributing 75% of total revenue. The Company’s revenue numbers surpassed forecasts of $633.5 million.

For Q1 2017, Garmin’s gross margin improved to 58.3% compared to 54.5% in Q1 2016. The Company’s operating margin improved to 18.2% in the reported quarter compared to 16.6% in the prior year’s corresponding quarter.

Garmin posted Q1 2017 net income of $237.8 million, or $1.26 per share, compared to earnings of $88.09 million, or $0.46 per share. Earnings, adjusted for non-recurring gains, came in at $0.52 per share surpassing analysts’ consensus of $0.45 per share.

Segment Results

During Q1 2017, Garmin’s Marine segment posted robust revenue growth of 26% at $104.45 million compared to revenue of $82.88 million in Q1 2016, driven by solid lineup of chartplotters, fishfinders, and entertainment products. The segment’s gross margin increased y-o-y to 57% with product mix shifting toward new products with higher margin profiles. Operating margin improved to 17%, resulting in 76% operating income growth.

Garmin’s Outdoor segment grew 20% to $115.88 million in Q1 2017, with significant contributions from wearable devices. The segment’s gross margin improved to 63% while operating margin improved to 30%, resulting operating income growth of 24%. For Q1 2017, Garmin’s aviation segment posted revenue growth of 16% to $122.87 million, primarily driven by growth in aftermarket products. The segment’s gross and operating margins were strong at 74% and 31%, respectively, resulting in 27% operating income growth.

During Q1 2017, Garmin’s Fitness segment posted revenue of $137.83 million, down 3% compared to revenue of $142.42 million, driven by lower volume in basic activity trackers partially offset by growth in our advanced wearables with GPS. The segment’s gross and operating margins increased y-o-y to 56% and 13%, respectively, resulting in an 11% growth in operating income.

Garmin’s Auto segment recorded revenue decline of 19% in Q1 2017 to $157.52 million, primarily due to the ongoing PND market contraction partially offset by growth in its Auto OEM product lines. Gross margin remained constant at 44%, while operating margin declined year-over-year to 4%.

Financial Details

Garmin’s total operating expenses in Q1 2017 were $256 million, an 8% increase from Q1 2016. Research and development increased 13% on a y-o-y basis, driven by aviation and advanced wearable products in fitness and outdoor. Selling, general, and administrative expenses increased 7% driven primarily by legal related expenses and information technology costs.

In Q1 2017, Garmin generated $95 million of free cash flow. The Company returned cash to shareholders with quarterly dividend of approximately $96 million and share repurchases activity, which totaled approximately $28 million in Q1 2017. Garmin has approximately $47 million remaining in the share repurchase program authorized through December 31, 2017, and expect to repurchase its stock as business and market conditions warrant. Garmin ended Q1 2017 with cash and marketable securities of approximately $2.3 billion.

As announced in February 2017, Garmin’s Board will recommend to the shareholders for approval at the annual meeting to be held on June 09, 2017, a cash dividend in the total amount of $2.04 per share, payable in four equal installments on dates to be approved by the Board.

Guidance

Garmin is maintaining its 2017 guidance of approximately $3.02 billion of revenue and approximately $2.65 of pro-forma EPS.

Stock Performance

At the closing bell, on Friday, May 19, 2017, Garmin’s stock marginally climbed 0.43%, ending the trading session at $51.22. A total volume of 696.71 thousand shares were traded at the end of the day. In the last three months and previous twelve months, shares of the Company have surged 1.80% and 34.26%, respectively. Moreover, the stock gained 6.67% since the start of the year. The stock is trading at a PE ratio of 14.67 and has a dividend yield of 3.98%.

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