Garmin Ltd. reported consolidated revenue for the first quarter ended March 30 amounted to $1.38 billion, a 20 percent increase compared to the prior-year first quarter period, and achieving record first quarter revenue in all four segments of its business.
Gross margin expanded 120 basis points to 58.1 percent of net sales in the quarter, compared to 56.9 percent in the year-ago comparative period.
Total operating expenses in the first quarter were $504 million, an 11 percent increase over the prior year. Research and development increased 10 percent primarily due to engineering personnel costs. Selling, general and administrative expenses increased 11 percent driven primarily by personnel related costs, including the impact of the acquisition of JL Audio.
Operating income increased 51 percent year-over-year to $298 million in the quarter. Operating margin for the quarter was 21.6 percent of net sales, compared to 17.2 percent in the 20203 first quarter.
Net income jumped 36.4 percent to $276.0 million, or $1.43 per diluted share, in the first quarter Pro forma EPS was $1.42 per share, representing 39 percent growth in pro forma EPS over the prior-year quarter.
In the first quarter of 2024, Garmin reported that it generated operating cash flows of $435 million and free cash flow of $402 million.
GRMN ended the quarter with cash and marketable securities of approximately $3.3 billion.
“We delivered outstanding performance in the first quarter with double-digit percentage growth in revenue and operating income. We attribute these noteworthy results to our strong product portfolio and the robust demand trends that we have been experiencing. We are pleased with our results and look forward to the opportunities ahead as the year continues to unfold,” offered Cliff Pemble, president and CEO, Garmin Ltd.
Fitness
Revenue from the Fitness segment increased 40 percent to $342.9 million in the first quarter with growth across all categories, led by strong demand for advanced wearables. Gross and operating margins were 57 percent and 20 percent, respectively, resulting in $68.1 million of operating income.
Outdoor
Revenue from the Outdoor segment increased 11 percent to $366.2 million in the first quarter, said to be primarily driven by growth in wearables. Gross and operating margins were 66 percent and 29 percent, respectively, resulting in $107.0 million of operating income.
Aviation
Revenue from the Aviation segment increased 2 percent to $218.9 million in the first quarter, reportedly driven by growth in OEM product categories. Gross and operating margins were 75 percent and 24 percent, respectively, resulting in $52.1 million of operating income.
Marine
Revenue from the Marine segment increased 17 percent to $326.7 million in the first quarter, said to be primarily driven by the acquisition of JL Audio. Gross and operating margins were 55 percent and 27 percent, respectively, resulting in $87.7 million of operating income.
Auto OEM
Revenue from the Auto OEM segment increased 58 percent to $129.0 million during the first quarter, said to be primarily due to increased shipments of domain controllers to BMW. Gross margin was 18 percent and we recorded an operating loss of $16.5 million.
2024 Fiscal Year Guidance
Consistent with prior years, and as the first quarter historically represents the lowest seasonal quarter of Garmin’s financial year, the com-any did not update its 2024 guidance for revenue of approximately $5.75 billion and pro forma EPS of $5.40.
Dividend Recommendation
The company paid a quarterly dividend of approximately $140 million in the first quarter.
As announced in February, the Board will recommend to the shareholders for approval at the annual meeting to be held on June 7, 2024, a cash dividend in the total amount of $3.00 per share payable in four equal quarterly installments.
Image courtesy Garmin Ltd.
