Summary
Garmin Ltd. reported net sales of $643.6 million for the third quarter of 2013, a decrease of 4% compared to the prior year period. This decline was primarily driven by a 16% decrease in the automotive/mobile segment, which still represented the largest portion of revenue at 50%. Despite the overall sales dip, the fitness segment saw a significant 25% increase in revenue, and the marine and aviation segments also experienced growth. Operating income for the quarter was $151.7 million, down 5% year-over-year, impacted by lower revenues and increased R&D spending, particularly in aviation. Net income, however, rose by a notable 34% to $187.7 million, largely due to a significant tax benefit of $52.2 million stemming from the release of uncertain tax position reserves. The company ended the quarter with a strong cash position of $1.07 billion.
Financial Highlights
50 data points| Revenue | $643.64M |
| Cost of Revenue | $290.75M |
| Gross Profit | $352.89M |
| R&D Expenses | $88.43M |
| SG&A Expenses | $86.46M |
| Operating Expenses | $201.14M |
| Operating Income | $151.75M |
| Net Income | $187.67M |
| EPS (Basic) | $0.96 |
| EPS (Diluted) | $0.96 |
| Shares Outstanding (Basic) | 195.32M |
| Shares Outstanding (Diluted) | 196.30M |
Key Highlights
- 1Net sales decreased 4% to $643.6 million in Q3 2013, primarily due to a 16% drop in the automotive/mobile segment.
- 2Fitness segment revenue grew by a robust 25%, and Marine and Aviation segments also showed positive year-over-year growth.
- 3Operating income declined 5% to $151.7 million, impacted by lower sales and increased R&D expenses.
- 4Net income saw a substantial increase of 34% to $187.7 million, largely driven by a significant tax benefit related to reserve releases.
- 5The company maintained a strong liquidity position with $1.07 billion in cash and cash equivalents at the end of the quarter.
- 6Garmin initiated a new share repurchase program, authorizing up to $300 million, with $26.9 million repurchased year-to-date.
- 7Research and Development expenses increased by 7% across the company, with significant investments in aviation and exploration of new product categories.