- HOME
- NEWS
- SPORTS
- BUSINESS
- FYI/LIVING
- ENTERTAINMENT
- OPINION
- JOBS
- CARS
- REAL ESTATE
- RENTALS
- CLASSIFIEDS
- SHOPPING
- EXTRAS
Posted on Wed, Nov. 04, 2009 10:56 PM
Holiday forecast spurs decline in Garmin stock
More News
Despite a better third quarter than expected, Garmin Ltd. saw its stock price plunge Wednesday after forecasting a less profitable holiday period.
Shares of Garmin, the country’s biggest producer of portable navigation devices, fell $4.57 to $26.84, down nearly 15 percent in heavy trading. Share prices have been pressured since Google Inc. recently announced its maps and routing software would be available for no extra charge on some mobile phones.
Still, Garmin earned $205.3 million, or $1.02 a share, for the three months that ended Sept. 26. During the same period last year, the company posted profits of $181.6 million, or 87 cents a share.
Analysts on average forecast earnings of 69 cents a share for the third quarter.
Sales were down about 10 percent in year-over-year comparisons. But the revenue of $781.3 million was much better than analysts’ average prediction of $703.9 million. Revenue also was up 17 percent from the second quarter and has been growing sequentially through 2009, indicating that consumer demand is returning.
In a statement, Garmin’s chairman and chief executive, Min Kao, said, “We remain focused on efforts to improve productivity and manage expenses as the consumer spending environment continues to recover.”
Garmin, based in the Cayman Islands with headquarters in Olathe, makes personal navigation devices that use global positioning technology for drivers, boaters, pilots, runners, cyclists and others.
Despite the company exceeding forecasts, analysts remain concerned that consumers will turn to cell phones for their navigation needs.
The better than expected third quarter, “as impressive as it is, will likely do little to ease investor concerns about the sustainability of the … (personal navigation device) business in a world of free Google mobile navigation,” analyst Yair Reiner of Oppenheimer & Co said.
Garmin introduced its own smartphone last month with AT&T Inc. called the Nuviphone G60. Sales have started out slow, and AT&T plans to reduce its price to $199 from $299, said Cliff Pemble, Garmin’s chief operating officer.
Garmin’s automotive-mobile segment, its biggest business, saw its quarterly sales fall 13 percent, to $546 million.
The Associated Press contributed to this report. To reach Randolph Heaster, call 816-234-4746 or send e-mail to rheaster@kcstar.com.
Posted on Wed, Nov. 04, 2009 10:56 PM
@Nyx.CommentBody@