Summary
Garmin Ltd. reported a solid financial performance for the second quarter and first half of fiscal year 2019, demonstrating revenue growth across key segments and improved profitability. Total net sales increased by 7% year-over-year for both the 13-week and 26-week periods, driven by strong performances in the outdoor, fitness, marine, and aviation segments. The auto segment, however, experienced a decline due to market contraction. The company also saw an improvement in gross profit and operating income, reflecting effective cost management and favorable product mix. Financially, Garmin maintained a strong balance sheet with substantial cash and marketable securities. While cash from operations saw a decrease year-over-year primarily due to working capital changes, the company's overall liquidity position remains robust. Significant investments were made in acquisitions and capital expenditures, reflecting strategic growth initiatives. Investors can note the company's continued investment in research and development and its positive outlook, despite ongoing market challenges in specific segments.
Financial Highlights
50 data points| Revenue | $954.84M |
| Cost of Revenue | $379.48M |
| Gross Profit | $575.37M |
| R&D Expenses | $148.88M |
| SG&A Expenses | $128.74M |
| Operating Expenses | $319.14M |
| Operating Income | $256.22M |
| Net Income | $223.66M |
| EPS (Basic) | $1.18 |
| EPS (Diluted) | $1.17 |
| Shares Outstanding (Basic) | 189.85M |
| Shares Outstanding (Diluted) | 190.71M |
Key Highlights
- 1Total net sales increased by 7% year-over-year for both the 13-week and 26-week periods, reaching $954.8 million and $1.72 billion, respectively.
- 2Strong performance in the Outdoor, Fitness, Marine, and Aviation segments drove revenue growth, with Fitness becoming the largest revenue contributor at 26% in Q2 2019.
- 3Operating income grew by 18% for the 13-week period and 13% for the 26-week period, demonstrating improved profitability.
- 4Gross profit margin improved to 60% for both periods compared to 59% in the prior year, indicating better cost management and product mix.
- 5The company reported a net income of $223.7 million for the 13-week period and $363.8 million for the 26-week period, up from $190.3 million and $319.7 million respectively.
- 6Garmin holds a strong liquidity position with approximately $2.4 billion in cash and marketable securities as of June 29, 2019.
- 7The Auto segment experienced a 13% and 12% decrease in net sales for the 13-week and 26-week periods, respectively, attributed to the ongoing PND market contraction.