Outdoor activity device maker Garmin (NASDAQ:GRMN) reported second-quarter earnings today that beat analyst estimates and were significantly better than what the company saw during the month of April. During its first-quarter earnings call, Garmin said it was seeing sales trending down 40% in April.
But business conditions quickly rebounded from those lows, the company said, and overall second-quarter sales were down just 9% compared to the year-ago period. The company reported strong growth in its fitness segment of 17%, while marine sales grew 4%. Gross margin and operating margin both increased sequentially from the first quarter.
Garmin reported earnings per share of $0.96 for the quarter, beating average analyst estimates of $0.38 per share. President and CEO Cliff Pemble commented: "Business conditions rapidly improved from April lows driven by popular fitness, marine, and outdoor products. We believe these results affirm the resilient nature of our business and the strong utility of our products."
Sales in Garmin's auto and aviation segments sank 46% and 31%, respectively, versus the year ago quarter. This was mainly due to pandemic-related impacts, the company said. But Garmin was still able to generate $142 million in free cash flow, amply supporting the dividend payout of $109 million in the quarter. Garmin ended the quarter with $2.7 billion in cash and marketable securities on its balance sheet, with no debt.
During the quarter, the company moved more into the health space, acquiring Firstbeat Analytics, which it called "a leading provider of physiological analytics technology for health, fitness and athletic performance."