Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Garmin Earnings Shrink, Stock Surges

Switzerland-based GPS specialist Garmin Ltd. (NASDAQ: GRMN  ) shares were soaring in early Wednesday trading, up 6.8% following release of the company's Q2 earnings results. Shares were up around 6% at the time of publication of this article.

This is despite Garmin warning of a "particularly challenging" third quarter ahead, and despite the firm's reporting numbers that seem somewhat underwhelming for Q2. Sales at the firm were down 3% in comparison to the year-ago quarter. Gross profit and operating profit margins both declined four full percentage points, pro forma earnings per share fell 22% to $0.76 per share, and the company's net was down 7% at $0.88 per share.

Nonetheless, this exceeded the number analysts had been expecting to see out of Garmin -- $0.65 per share -- which may explain the enthusiastic reception a decline in earnings is receiving. Garmin CEO Cliff Pemble noted that however bad the numbers may look on the surface, "the second quarter of 2013 was highlighted by stronger than expected revenue performance across all segments."

Longer term however, Pemble notes that Garmin continues to entertain hopes of returning to "sustained revenue and EPS growth." Analysts, on average, are forecasting earnings growth of better than 5% over the next five years.


Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 31, 2013, at 1:55 PM, ganeshsastri wrote:

    Instead of saying pro-forma earnings, you should say IMAGINARY EARNINGS.

  • Report this Comment On July 31, 2013, at 4:19 PM, jasenj1 wrote:

    We shrank less than we expected to. How does that translate into a rise in stock price?

    OTOH, they still have a low P/E and high dividend, so they are still priced to buy if they can stave off a collapse.

    But I'd be very wary of buying into a shrinking business.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2570171, ~/Articles/ArticleHandler.aspx, 9/28/2016 4:42:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,228.30 133.47 0.74%
S&P 500 2,159.93 13.83 0.64%
NASD 5,305.71 48.22 0.92%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 4:00 PM
GRMN $49.01 Up +0.72 +1.49%
Garmin CAPS Rating: **