Categories Analysis, Earnings, Technology

Earnings preview: Has Garmin stayed fit through the second quarter?

Garmin Ltd. (GRMN) is scheduled to report its second-quarter 2018 earnings results on August 1. For the first quarter, the sports watch-maker reported an 11% increase in sales and a 31% increase in pro forma EPS. Sales growth was helped by strength across all divisions except auto, with the highest improvement seen in the outdoor division.

According to a report by Markets Insider, for the second quarter, analysts expect Garmin to report sales of over $843 million, which would reflect an increase of 3% over last year. Earnings are expected to come in at $0.86 per share.

Last quarter Garmin had guided for full-year 2018 revenues of $3.2 billion and pro forma EPS of $3.05. Analysts expect EPS to come in at $3.13 and revenues to total $3.23 billion.

During the first quarter, Garmin saw significant growth in the outdoor and fitness segments with sales increases of 24% and 20% respectively. The company continues to see opportunities for wearables in both these segments. The wearables market is seeing good growth and Garmin, along with Fitbit (FIT), is said to be giving tough competition to Apple (AAPL).

Garmin sees opportunities for wearables in the outdoor and fitness segments

Earlier this month, it was reported that the imposition of tariffs on $200 billion of Chinese goods was likely to hurt smartwatches and wearables. While Fitbit was named as a possible victim of the tariff war, it is not clear whether Garmin would be impacted in any way. This might be an area to watch out for.

Meanwhile, Garmin’s co-founder Min Kao has sold over 4 million shares, worth more than $260 million, from his stake in the company over the past five months.

Gauging by the strength in the wearables market, Garmin is likely to report positive results for its second quarter. The strength in the outdoor and fitness devices markets could prove to be beneficial for the company this quarter too.

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top