DOW JONES NEWSWIRES
Garmin Ltd.'s (GRMN) third-quarter profit rose 26% as improved margins more than offset a moderate decline in revenue.
Chief Executive Min Kao also noted the company's business improved sequentially. Sales improved 17% from the previous quarter, with its top two segments - automotive/mobile and outdoor/fitness -posting revenue increases from the previous quarter.
Last week, a blog posting that Google Inc. (GOOG) was introducing free navigation systems for mobile phones ripped into stocks of established GPS device makers such as Garmin and Dutch rival TomTom NV (TOM2.AE). The two GPS device makers have been hurt by a sharp drop in consumer spending and increasing competition from mobile phones. Last month, TomTom reported a 47% drop in third-quarter profit as average selling prices for its devices fell by 27%.
For the latest quarter, Garmin reported a profit of $215 million, or $1.07 a share, up from $171.2 million, or 82 cents a share, a year earlier. Excluding currency fluctuations, earnings rose to $1.02 a share from 87 cents.
Revenue sank 10% to $781.3 million.
The analysts' average estimates were for earnings of 69 cents on revenue of $704 million, according to a poll by Thomson Reuters.
Gross margin jumped to 52.4% from 44.3%.
Revenue in its automotive and mobile segment, the company's largest, dropped 13%, as the aviation segment also saw a sales decline of 29%. That was offset by sales growth in the outdoor and fitness and marine segments, which posted increases of 11% and 3.1%, respectively.
Revenue in North America and Europe continued its decline year-over-year, although Asia sales improved by 8%.
Shares of Garmin closed Tuesday at $31.41 and weren't active premarket. The stock is up 64% so far this year.
-By Joan E. Solsman and Jenny Park, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com