Summary
Garmin Ltd. reported strong top-line growth for the first quarter of 2018, with net sales increasing 11% year-over-year to $710.9 million. This growth was primarily driven by robust performance in the Outdoor, Fitness, Aviation, and Marine segments, which collectively saw an 18% increase in net sales. The company also experienced an 14% increase in gross profit, reaching $426.5 million, accompanied by an improvement in gross margin to 60% from 58% in the prior year period. This indicates effective cost management and favorable product mix shifts. Despite overall revenue growth, net income saw a significant decrease of $109 million compared to the prior year's first quarter, landing at $129.4 million. This was largely due to a substantial income tax benefit in the first quarter of 2017 related to the revaluation of deferred tax assets. Excluding this one-time item, the company's operational performance remains positive, with operating income increasing by 22% to $142.2 million. The company maintains a healthy liquidity position with $2,375.9 million in cash and marketable securities, sufficient to cover operational needs and strategic investments.
Financial Highlights
50 data points| Revenue | $710.87M |
| Cost of Revenue | $284.34M |
| Gross Profit | $426.54M |
| R&D Expenses | $141.96M |
| SG&A Expenses | $117.06M |
| Operating Expenses | $284.33M |
| Operating Income | $142.20M |
| Net Income | $129.37M |
| EPS (Basic) | $0.69 |
| EPS (Diluted) | $0.68 |
| Shares Outstanding (Basic) | 188K |
| Shares Outstanding (Diluted) | 189K |
Key Highlights
- 1Net sales increased by 11% to $710.9 million in Q1 2018, driven by growth in Outdoor, Fitness, Aviation, and Marine segments.
- 2Gross profit rose by 14% to $426.5 million, with gross margin improving to 60% from 58% in the prior year.
- 3Operating income increased by 22% to $142.2 million, indicating strong operational performance.
- 4Net income decreased significantly to $129.4 million from $238.4 million due to a large tax benefit in the prior year's comparable quarter.
- 5The Auto segment experienced a 12% decline in revenue, primarily attributed to the shrinking Personal Navigation Device (PND) market.
- 6Advertising expenses decreased by 20% to $25.3 million.
- 7The company ended the quarter with $2,375.9 million in cash and marketable securities, indicating a strong liquidity position.