* Says recall won't affect results
* Says battery supplier to share replacement cost
(Adds details, analyst comment, updates share movement)
Aug 25 Garmin Ltd (GRMN.O) said it was
recalling about 1.25 million personal navigation devices (PNDs)
because of a potential fire hazard from overheating batteries,
but did not expect the recall to hurt its results.
The No.1 U.S. PND maker said the recall affected its nuvi
range of devices with batteries by a third-party supplier
within a defined date code range and a specific printed circuit
It said the battery supplier has agreed to share the cost
of replacement packs.
The recall comes in the backdrop of a steep decline in PND
sales, hurt by the growing popularity of navigation-enabled
"I don't think it means much. Product recalls in the
consumer electronic space are not unusual and recalls involving
battery issues are fairly common," Yair Reiner, an analyst at
Oppenheimer & Co said by phone.
He added that a problem with Apple's (AAPL.O) 3G iPhone's
power adapter in 2008 did not seem to quell demand for the
PND sales accounted for about half of Garmin's total
revenue in the last quarter. The company sold 4 million PND
units in the last quarter.
The battery overheating problem has been identified in
fewer than 10 cases and none of the reported incidents caused
injury, the company said in a statement.
About 796,000 of the recalled units were sold in the United
States, Garmin said.
Garmin shares were trading down 10 cents at $26.45 in
morning trade on Nasdaq, after hitting a new 52-week low of
$26.11. They have fallen more than 11 percent in the past year.
The company's shares are usually heavily shorted, with
short interest sometimes rising to more than 10 percent of
total float. In comparison, blue-chip technology stocks such as
Google (GOOG.O) and Apple (AAPL.O) have short interest
positions below 2 percent.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Vyas