Garmin Ltd. shares fell sharply following the company’s report of lower revenues late last year partly because of a fading seasonal boost from holiday sales.
The Olathe-based company’s stock was down $3.91 a share at $35.33, a 9.96 percent drop, in morning trading.
Falling revenues in most businesses led to a 21.9 percent drop in fourth quarter earnings, the company said. Garmin said sales in its fitness lines increased compared with a year ago, but all others fell.
Sales of the company’s personal navigation devices, which help consumers navigate roads, fell more quickly than expected in the last three months of the year.
Analyst Andrew Spinola at Wells Fargo Securities said in a note to clients that the larger than expected drop suggests the traditional yearend sales boost is fading as these devices “have become less of a holiday gift item and this clearly played out” at the end of 2012.
Earnings in the quarter were $129.3 million, or 66 cents a share, compared with $165.6 million, or 85 cents a share, a year earlier.
Total revenues in the quarter were $769 million, down 16 percent from the $910 million in revenues the fourth quarter produced in 2011.
“Though business trends decelerated in the fourth quarter, we remain focused on new product development and market share gains to offset the secular declines in the PND (personal navigation device) industry and the continued generation of long-term shareholder value,” Chief Executive Cliff Pemble said in the company’s announcement.
For all of 2012, Garmin’s revenues totaled $2.7 billion, down 2 percent. Executives said 2013 revenues likely would be between $2.5 billion and $2.6 billion. Earnings for 2012 were $542.4 million, or $2.76 a share, compared with $520.9 million, or $2.67 a share. This year’s profits should be between $2.30 and $2.40 a share, the company said. Garmin makes navigation, communication and information devices for the automotive, mobile, aviation, fitness and other markets.