Garmin Crushes Earnings Estimates

Garmin (Nasdaq: GRMN  ) reported earnings Wednesday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Garmin beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved and GAAP earnings per share increased significantly.

Margins improved across the board.

Revenue details
Garmin reported revenue of $718.2 million. The 11 analysts polled by S&P Capital IQ expected to see revenue of $686.5 million on the same basis. GAAP reported sales were 6.5% higher than the prior-year quarter's $674.1 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.98. The 12 earnings estimates compiled by S&P Capital IQ anticipated $0.66 per share. GAAP EPS of $0.95 for Q2 were 70% higher than the prior-year quarter's $0.56 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 58.7%, 1,090 basis points better than the prior-year quarter. Operating margin was 28.4%, 890 basis points better than the prior-year quarter. Net margin was 25.9%, 970 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $666.5 million. On the bottom line, the average EPS estimate is $0.64.

Next year's average estimate for revenue is $2.80 billion. The average EPS estimate is $2.80.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 4,354 members rating the stock outperform and 437 members rating it underperform. Among 1,063 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 956 give Garmin a green thumbs-up, and 107 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Garmin is hold, with an average price target of $49.23.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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