Slower consumer spending and lower demand from retailers led to Garmin's "most challenging quarter" since going public in 2000, thedevice maker's CEO said Wednesday.
Total revenue for Garmin's first quarter, which ended March 29, dropped to $437 million, down 34 percent from $664 million in the first quarter of 2008.
Earnings per share sunk to 24 cents from 67 cents in the year-ago quarter, marking a 24 percent drop. That compares with expectations of analysts polled by Thomson Reuters of 42 cents per share on revenue of $531.6 million. Excluding the impact from foreign-exchange rates, earnings per share decreased 64 percent year over year, to 25 cents from 69 cents.
Garmin's geographical units each saw weaker results. North American revenue fell to $265 million, compared with $411 million in the same quarter of 2008, down 36 percent. Sales in Europe dropped to $144 million from $211 million, down 32 percent. Revenue in Asia was $28 million, compared with $42 million, down 33 percent.
"Our financial results for the first quarter clearly reflect the difficult end markets we are facing, but we remain focused on generating improved results from the top line to the bottom line over the remainder of 2009," Kevin Rauckman, chief financial officer of Garmin, said in a statement.
Among the company's business segments, only the outdoor-fitness market showed improvement, with sales up 13 percent. Revenue was lower in the automotive/mobile, marine, and aviation markets.
Garmin said it expects better results ahead, due to cost cuts and its new portable-navigation and outdoor-fitness products, including:
- Nuvi 1200 and 1300 series and the 1490T. GPS devices for pedestrians to navigate cities.
- Approach G5. A touch-screen GPS device for golfers.
- Forerunner 405CX. Sports watch that tracks distance, pace, and heart rate for runners.
- Forerunner 310XT. GPS-enabled sports device to track data for runners, bikers, and swimmers.
"We expect that these products, along with further steps to reduce costs, will help us to see improvement to our profitability levels in the second quarter," CEO Min Kao said in the statement. "As always, we remain committed to taking appropriate steps to reduce costs while maintaining our aggressive approach to the development of new products and technology."