Garmin seems to have recovered from the raw material supply issues it experienced over the past two quarters with increased sales, margins, and profitability during the second quarter. The consumer segment, which includes outdoor and fitness oriented GPS units, experienced 42% revenue growth during the second quarter to $210.3 million. Garmin management singled out new outdoor fitness products as top performers. The consumer segment accounted for 80% of total revenues.
Garmin saw growth across all geographic regions with North American revenue at $154 million, up 23% from $125.7 million a year ago. Europe revenue was $97.4 million, a 73% increase from $56.3 million and Asian revenue increased 70%, to $13.1 million. Approximately 38% of second quarter sales were generated from products that Garmin introduced to the markets within the last year.
Consumer gross margin increased to 49.3% from 48.4% a year ago, but the improved gross margins were more than offset by higher SG&A expenses due to advertising expenditures during the period. Operating margins were basically flat at 33.7%. Net income was $74.2 million over the $56.3 million last year with diluted EPS at 68 cents compared to 52 cents last year. For the second quarter, the total units sold across the entire business increased 24% to 707,000 units compared to 569,000 units the second quarter of '04.
Given the strong results in the first half of 2005, Garmin updated its previous guidance. Diluted EPS for fiscal year 2005 is now estimated to be in the range of $2.43 to $2.48 on estimated revenues of $950 million to $975 million.
