Garmin Ltd. reported revenues in its Outdoor/Fitness segment revenue increased 54% to $119 million in the second quarter. The gains were due to the strength of our product introductions in the quarter, including the Colorado series, the Forerunner 405 and the Edge 705.

“We look forward to increased sales generated by our recently announced title sponsorship of Team Garmin/Chipotle which just completed the Tour de France, as well as our new Oregon(TM) series which provides rugged and durable touch screen products to the  utdoor market,” said Dr. Min Kao, Garmin’s chairman and CEO, in a statement. “We still see considerable growth opportunities for this segment during the second half of 2008 and are raising revenue growth estimates accordingly.”

Total revenue of $912 million, up 23% from $742 million in second quarter 2007. Automotive/Mobile segment revenue increased 24% to $632 million. Aviation segment revenue increased 15% to $90 million. Marine segment revenue decreased 11% to $71 million.

By region, North America revenue was $576 million compared to $455 million, up 27%. Europe revenue was $307 million compared to $257 million, up 19%. Asia revenue was $29 million compared to $31 million, down 6%.

Second quarter earnings improved to $255.2 million, or $1.19 a share, from $219.7 million, or $98 cents, a year ago.

Gross margin remained solid at 45.8% compared to 48.2% in first quarter 2008 and 50.5% in second quarter 2007. The automotive/mobile segment gross margin continued to be sound at 39% as PND pricing declines moderated and we continued to get benefit from material cost reductions and improved operating efficiencies. Gross margin for the other three segments remained solid when compared with the year-ago quarter with aviation and outdoor/fitness increasing as we took advantage of the strength of the product offerings delivered to the market over the past year.

Operating margin was up 20 basis points sequentially to 26.2% in first quarter 2008 and was down compared to 32.5% in second quarter of 2007. The sequential operating margin expansion occurred within the outdoor/fitness and aviation segments as we continued to roll out new products. Our auto/mobile operating margin performance reflects the price declines in PND offset by favorable cost reductions during the quarter. During the second half of 2008, we anticipate that PND margins will fall further but not as significantly as earlier anticipated due to the better than expected pricing environment.

Garmin also said it generated $34 million of free cash flow in the second quarter of 2008, resulting in a cash and marketable securities balance of just over $1.0 billion at the end of the quarter.”

Fiscal 2008 Outlook

Garmin said that while it remains optimistic about the future based on growing demand for navigational products and its leadership position in the industry, “we recognize that macroeconomic conditions and high fuel prices have had an impact on our growth. With this in mind, we are updating our guidance as follows:

• We anticipate overall revenue to be $3.9 billion in 2008, and earnings per share of $4.13 (excluding FX) including the $0.27 related to the tender of our Tele Atlas N.V. shares.
  
• We anticipate segment revenue growth rates for our automotive/mobile, outdoor/fitness, and aviation segments to be 25%, 30%, and 15%, respectively.
  
•  We remain optimistic regarding our long-term growth opportunities in the marine segment but due to the macroeconomic conditions and high fuel prices are now forecasting revenues to be flat in 2008.
  
• We anticipate operating margins to be approximately 25% for the full year 2008.
  
• Our effective tax rate should remain approximately 19%.”