The Fenix 3 Sapphire, Garmin's high-end fitness watch. Source: Garmin

Garmin (NASDAQ:GRMN) turned in its third quarter report early on Wednesday. The maker of dedicated GPS devices and fitness watches reported earnings and revenue that fell short of analyst expectations, though it was in line with the preliminary results it posted earlier this month.

Garmin earned an adjusted $0.51 per share on revenue of $680 million -- the same figures Garmin told investors to anticipate on Oct. 14. Analysts, however, had been looking for Garmin to earn around $0.55 per share on revenue of about $687.6 million.

Auto continues to decline
Garmin's largest segment remains its automotive GPS offerings, which include individual personal navigator units, as well as systems sold to automotive manufacturers. Auto brought in just over 36% of Garmin revenue in the third quarter, down from over 43% in the same quarter last year.

In total, auto revenue was down 14% on an annual basis. The business faces continued pressure from the growing proliferation of mobile devices, most notably smartphones, which reduce the need for dedicated GPS units. Garmin's management, however, is well aware of these challenges, and the decline was in line with the guidance it has provided for the segment in the past.

Fitness growth plummets, other segments stall
Garmin has four other segments -- fitness, outdoor, aviation, and marine. Fitness is by far the most significant, being the second largest business and the only one that is growing.

Fitness revenue rose 23% on an annual basis, generating about 21% of total sales. That's down significantly from prior quarters. In the fourth quarter of last year, fitness revenue rose 70%. Garmin had expected the segment to grow 25% for the year in total, but lowered that estimate to 15% earlier this month. Garmin continues to innovative in terms of its fitness products but faces tough competition. In its earnings release, Garmin said competitive pressure limited its gross margin.

The outdoor and aviation segments both suffered from 5% revenue declines. Garmin blamed the weakness in its outdoor segment on exposure to particular currencies, while it cited the slowing aviation market to explain the latter. Garmin's marine segment was flat on an annual basis, as the company struggled with a difficult comparison given last year's acquisition of Fusion Electronics.

Continued struggles
Garmin has been a terrible stock to own in 2015 -- shares have fallen more than 34% this year. The decline of its automotive business was expected, but the slowdown in its fitness business has been more rapid than investors expected.

To its credit, Garmin does have $2.4 billion of cash on its balance sheet (about 36% of its market cap) and is currently yielding almost 6%. But Garmin is a product-driven company and increasingly, its products don't appear competitive. Garmin CEO Cliff Pemble blamed the company's 2015 performance on the "global economic environment" but admitted that Garmin is facing tough competition.

Garmin intends to release a flurry of new products throughout the rest of this year and in 2016, but management isn't looking for a major turnaround in the fourth quarter. For the full year, it's expecting to generate $2.8 billion, down from the $2.9 billion it previously anticipated.