Garmin Forecasts Lowers Earnings and Revenue Expectations

Garmin has predicted lower revenue for the year after watching business slow down earlier last month, although amidst the financial crisis that rocks the world the company still managed to record double-digit gains in its revenue in the third quarter (Q3) and for the year to date. However it decides to lower its forecast for the year, because of the current state of the economic conditions and the impact it's having in the global market.

Expressing its company reasons for this decision, Min Kao, Garmin chairman and CEO said that "While most of our segments continue to grow, we are cognizant of the continued economic slowdown and business climate. As such, we are actively taking steps to manage our business appropriately. These include scaling our operations to better match current business conditions and changes to inventory planning that will allow us to reduce inventory levels by approximately $150 million by the end of the year. In addition, we will be more focused in our advertising spending as the economy and portable navigation device market change."

The company reported earning $171.2 million, or 82 cents per share, compared with $193.5 million, or 88 cents per share, during the same period a year ago. Revenue for the quarter rose 19 percent from $728.7 million to $870.4 million, also above Wall Street expectations of $865.6 million.

Garmin said it sold 3.9 million units during the quarter, a 43 percent jump from the year-ago period. The increase was driven by a 21 percent surge in its automotive/mobile segment, a 35 percent rise in its outdoor/fitness segment and a 9 percent uptick in its aviation segment. Sales in Garmin's marine segment declined 8 percent.

Garmin also said it still expects it will roll out the Nuvifone, a cell phone that includes many of the features of its Nuvi line of GPS devices, in the first half of 2009. It originally expected to enter the cell phone market during the fourth quarter but said earlier this year it was delaying the launch because of continued negotiations with wireless carriers.