Olathe-based Garmin Ltd. reports a surge in revenue and profits
04/30/2014 9:44 PM
04/30/2014 9:44 PM
Garmin Ltd. on Wednesday reported a surge in first-quarter revenue and profits as sales increased in four of its five main product lines.
The maker of a wide range of navigation and fitness products linked to global positioning satellite technology said sales climbed 10 percent to $583.2 million in the first three months of 2014.
Earnings increased to $118.8 million in the quarter that ended March 29, compared with a profit of $88.7 million in the first quarter last year. The earnings were better than expected, according to a survey of analysts by Thomson Reuters.
Garmin, which maintains its operating headquarters in Olathe, said revenue climbed in its outdoor, fitness, aviation and marine product lines. Those four categories accounted for 58 percent of Garmin’s total revenues in the quarter.
Revenue for its Forerunner and other fitness products increased 38 percent in the quarter from the comparable period in 2013. This business, which sells products such as GPS-enabled watches to count calories and monitor heart rates, is the second-largest revenue generator for Garmin.
The marine and aviation markets each generated revenue increases of 19 percent during the quarter. Garmin’s outdoor market revenue increased 10 percent.
The only market showing a decline was the automotive and mobile business, where revenue fell 4 percent in the latest quarter.
Automotive and mobile GPS products remain Garmin’s largest revenue contributor, but growth has slowed in recent years, partly because of intense competition from European rival TomTom and others. In the first quarter, this unit generated about $243 million in sales, down from $252.6 million for the same quarter a year ago.
While Garmin said sales of personal navigation devices in its auto and mobile business are expected to decline throughout 2014, the company is “pleased” with this unit’s market share and profitability in the industry.
Cliff Pemble, Garmin’s president and chief executive, said in the earnings release that the company is off to a “great start” in 2014, “yet we realize we cannot be complacent.”
The company said it will update its earnings and revenue outlook at the end of the second quarter.