Garmin Performs Better Than Estimated

Garmin Ltd (GRMN) was riding high on the crest of success when it bared its quarter earnings which surpassed Zacks Consensus Estimate by over 30 percent. Revenue also went beyond the consensus by over 18 percent, and the currency revealed an 11-cent negative impact on earnings.

The company’s revenue for the fourth quarter was posted at $910 million, which is a 36 percent increase over the prior quarter’s figure and 8.5 percent from previous year’s performance. The increases were brought about by positive seasonality of the different products offered by the company. The North American market is responsible for driving up sales of the company as sales from the said region accounts for more than 50 percent of its business. The seasonality from this region is most pronounced in this regard.

Operating expenses amounting to $233.7 million represent an 18.5 percent from the previous quarter’s expenses of $197 million and also 20 percent above the $195 million expenses for the same quarter a year ago.

Garmin attributes its strong performance to focused target markets which resulted in stable revenues and steadier pricing.

Since the year 2009, Garmin stock is climbing slowly but steadily, seeking to return to the now-distant prices of above $100 per share, which it saw in 2007. It has recently surpassed the $40 resistance (established in early 2010) and has increased its climbing pace since October 2011, gaining over 50 percent in four months. $50 seems to be the next major obstacle for GRMN.