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.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.
More from The Motley Fool
Why Garmin's Stock Gained 23% in 2017
Sales and profits improved despite weak results from a few of the company's product categories.
Wearables Stocks: What to Watch in 2018
Shifting market shares, hardware and software battles, and an expansion into new categories will dominate the wearables market this year.
3 Wearables Stocks to Buy for 2018
Apple and Garmin aren't surprising winners in wearables, but what about the company that makes new wearable tech possible?