Garmin Ltd. reported revenues slumped 10.2% in the third quarter of 2009, reflecting significant weakness from the company’s Auto/Mobile and Aviation segment that more than offset growth from the Outdoor/Fitness and Marine segments. Revenues for the Cayman Islands-based company fell to $781.3 million from $870.4 million a year ago. Net income increased 25.6% to $215.1 million, or $1.07 per diluted share, from $171.2 million, or 82 cents per diluted share, in the year-ago period.
Revenues for the Outdoor/Fitness segment surged 11.4% to a record $132.1 million from $118.6 million a year ago. In a conference call with analysts, management attributed the improvement to the market’s reception of newly introduced products at the retail channel, including the Dakota line of handlhelds in the Outdoor market and the Forerunner line in the Fitness segment.
Margins for the Outdoor/Fitness segment were 63%, flat to last year, as price and material costs remained “relatively stable.” Operating margins for the Outdoor/Fitness segment fell to 40% from 44% a year ago due to increased SG&A costs.
By region, revenues for North America fell 23% to $1.20 billion from $1.57 billion a year ago. Europe fell 24% to $577 million from $764 million while Asia slid 4% to $105 million from $109 million a year ago.
Gross margins for the company were 52.4% compared to $44.3 million a year ago. Operating income was 30.3% compared to 24.6% a year ago. The company generated $281 million of free cash flow in Q3 for a cash and marketable securities balance of just over $1.8 billion.
