We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Garmin Ltd. (GRMN - Free Report) has reported first-quarter 2021 pro-forma earnings of $1.18 per share, beating the Zacks Consensus Estimate by 34.1%. Further, the bottom line improved 30% on a year-over-year basis but declined 31.8% sequentially.
Net sales were $1.1 billion, which surpassed the Zacks Consensus Estimate of $931.8 million. Further, the figure increased 25% from the year-ago quarter but decreased 20.6% from the prior quarter.
Top-line growth was driven by strong performance delivered by the company’s marine, outdoor, auto and fitness segments.
However, sluggishness in the aviation segment was concerning.
Nevertheless, Garmin’s strong focus on continued innovation, diversification and market expansion to explore opportunities across all business segments remains a major positive. Further, its strong product lines are expected to aid its performance in the near term.
Outdoor (23.9% of net sales): The segment generated sales of $256.5 million in the reported quarter, improving 46% year over year. The year-over-year increase was primarily driven by robust demand for Garmin’s adventure watches.
Fitness (28.7%): The segment generated sales of $308.1 million, which increased 38% from the year-ago quarter. This can be primarily attributed to its well-performing advanced wearables and cycling products.
Aviation (16.2%): The segment generated sales of $173.9 million, declining 8% on a year-over-year basis. This was due to sluggish contributions from ADS-B products.
Marine (19.6%): Garmin generated sales of $209.4 million from the segment, increasing 28% on a year-over-year basis. The company witnessed solid momentum across chartplotters and Panoptix Live Scope sonars in the reported quarter, which, in turn, drove the segment’s revenues.
Auto (11.6%): The segment generated sales of $124.5 million, up 18% from the prior-year quarter. This was primarilydriven by strengthening momentum across specialty categories and new OEM programs.
Revenues by Geography
Americas: Garmin generated sales of $503.7 million from this region in the reported quarter (47% of net sales), up 18% year over year.
EMEA: The region generated sales of $399.5 million in the first quarter (37%), up 33% on a year-over-year basis.
APAC: The company generated sales of $169.1 million from the region (16%), improving 31% from the year-ago quarter.
Operating Results
In the first quarter, gross margin was 59.8%, which expanded 60 basis points (bps) from the year-ago period.
The company’s operating expenses of $391.9 million were up 18.9% from the prior-year quarter.However, as a percentage of revenues, the figure contracted 200 bps year over year to 36.5%.
Operating margin of 23.3% in the reported quarter expanded 260 bps year over year.
Balance Sheet & Cash Flow
As of Mar 27, 2021, cash, cash equivalents and marketable securities were $1.94 billion, higher than $1.85 billion as of Dec 26, 2020.
In the first quarter, inventories were $837.9 million compared with $762.1 million in the fourth quarter. We note that the company had no long-term debt for the reported quarter.
Further, it generated $368.4 million of cash from operations in the reported quarter compared with $435.8 million in the previous quarter.
Further, the company generated free cash flow of $331 million.
Further, Garmin paid out dividends worth $117 million to shareholders in the first quarter.
2021 Guidance
The company projects net sales of $4.6 billion. The Zacks Consensus Estimate for 2021 net sales is pegged at $4.61 billion.
Also, the company projects pro-forma earnings at $5.15 per share. The consensus mark for 2021 earnings is pegged at $5.19 per share.
The long-term earnings growth rates of KLA, AMETEK and Vishay are pegged at 14.03%, 8.78% and 20.26%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Garmin (GRMN) Q1 Earnings & Sales Beat Estimates, Rise Y/Y
Garmin Ltd. (GRMN - Free Report) has reported first-quarter 2021 pro-forma earnings of $1.18 per share, beating the Zacks Consensus Estimate by 34.1%. Further, the bottom line improved 30% on a year-over-year basis but declined 31.8% sequentially.
Net sales were $1.1 billion, which surpassed the Zacks Consensus Estimate of $931.8 million. Further, the figure increased 25% from the year-ago quarter but decreased 20.6% from the prior quarter.
Top-line growth was driven by strong performance delivered by the company’s marine, outdoor, auto and fitness segments.
However, sluggishness in the aviation segment was concerning.
Nevertheless, Garmin’s strong focus on continued innovation, diversification and market expansion to explore opportunities across all business segments remains a major positive. Further, its strong product lines are expected to aid its performance in the near term.
Garmin Ltd. Price, Consensus and EPS Surprise
Garmin Ltd. price-consensus-eps-surprise-chart | Garmin Ltd. Quote
Segmental Details
Outdoor (23.9% of net sales): The segment generated sales of $256.5 million in the reported quarter, improving 46% year over year. The year-over-year increase was primarily driven by robust demand for Garmin’s adventure watches.
Fitness (28.7%): The segment generated sales of $308.1 million, which increased 38% from the year-ago quarter. This can be primarily attributed to its well-performing advanced wearables and cycling products.
Aviation (16.2%): The segment generated sales of $173.9 million, declining 8% on a year-over-year basis. This was due to sluggish contributions from ADS-B products.
Marine (19.6%): Garmin generated sales of $209.4 million from the segment, increasing 28% on a year-over-year basis. The company witnessed solid momentum across chartplotters and Panoptix Live Scope sonars in the reported quarter, which, in turn, drove the segment’s revenues.
Auto (11.6%): The segment generated sales of $124.5 million, up 18% from the prior-year quarter. This was primarilydriven by strengthening momentum across specialty categories and new OEM programs.
Revenues by Geography
Americas: Garmin generated sales of $503.7 million from this region in the reported quarter (47% of net sales), up 18% year over year.
EMEA: The region generated sales of $399.5 million in the first quarter (37%), up 33% on a year-over-year basis.
APAC: The company generated sales of $169.1 million from the region (16%), improving 31% from the year-ago quarter.
Operating Results
In the first quarter, gross margin was 59.8%, which expanded 60 basis points (bps) from the year-ago period.
The company’s operating expenses of $391.9 million were up 18.9% from the prior-year quarter.However, as a percentage of revenues, the figure contracted 200 bps year over year to 36.5%.
Operating margin of 23.3% in the reported quarter expanded 260 bps year over year.
Balance Sheet & Cash Flow
As of Mar 27, 2021, cash, cash equivalents and marketable securities were $1.94 billion, higher than $1.85 billion as of Dec 26, 2020.
In the first quarter, inventories were $837.9 million compared with $762.1 million in the fourth quarter. We note that the company had no long-term debt for the reported quarter.
Further, it generated $368.4 million of cash from operations in the reported quarter compared with $435.8 million in the previous quarter.
Further, the company generated free cash flow of $331 million.
Further, Garmin paid out dividends worth $117 million to shareholders in the first quarter.
2021 Guidance
The company projects net sales of $4.6 billion. The Zacks Consensus Estimate for 2021 net sales is pegged at $4.61 billion.
Also, the company projects pro-forma earnings at $5.15 per share. The consensus mark for 2021 earnings is pegged at $5.19 per share.
Zacks Rank & Stocks to Consider
Currently, Garmin carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are KLA Corporation (KLAC - Free Report) , AMETEK, Inc. (AME - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) . All three companies currentlycarry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rates of KLA, AMETEK and Vishay are pegged at 14.03%, 8.78% and 20.26%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>