* Q4 adj profit $0.76/shr vs est $0.62/shr
* Q4 rev $759.7 mln vs est $712.8 mln
* Sees 2014 adj profit $2.50-$2.60/shr vs est $2.56/shr
* Sees 2014 rev $2.6-$2.7 bln vs est $2.58 bln
* Shares rise as much as 12 pct
(Adds analyst comment; updates shares)
By Soham Chatterjee
Feb 19 Garmin Ltd handily beat
quarterly profit estimates and forecast a strong 2014 as sales
of GPS-based fitness, aviation and outdoor products more than
made up for shrinking sales of personal navigation devices, a
market it once dominated.
Garmin shares jumped as much as 12 percent to $52.72 - their
highest in six years. The stock, however, is still a far cry
from the high of $124 it hit in 2007, when personal navigation
devices were high in demand and featured on most year-end
Garmin said on Wednesday it expects revenue to grow 10-15
percent from businesses other than its personal navigation
device unit, where revenue is expected to fall 10-15 percent.
The forecast implies that sales from personal navigation
devices will account for less than half of the company's revenue
Sales from the personal navigation devices unit fell 12
percent to $382.5 million in the fourth quarter, while sales
from all other units combined rose 14 percent to account for
nearly half of the company's total sales of $759.7 million.
Much of that was driven by strong sales in the company's
aviation and fitness businesses.
Aviation unit sales jumped 25 percent to $87.4 million in
the quarter. The unit makes audio panels and collision avoidance
systems for aircraft makers such as Textron Inc's Cessna
and Bombardier Inc's LearJet.
Sales at its fitness business, which makes products such as
GPS-enabled "Forerunner"-branded watches to count calories and
monitor heart beats, rose 14 percent to $118.6 million.
The company said it expects higher-margin, newly-launched
products such as "VIRB" outdoor action-recording camera,
"vivofit" health-monitoring bands and cycling computers to
generate revenue growth in 2014.
Gross margins are expected to rise to 54-55 percent from 52
percent in 2013.
"We are particularly impressed with the revenue guidance.
Garmin typically guides conservatively at the beginning of the
year so we think the company must be feeling very good about its
business," Wells Fargo analyst Andrew Spinola said.
Dutch rival TomTom - Europe's largest maker of
navigation devices - said last week it expects the personal
navigation device market to continue to decline this year due to
a slump in demand for personal sat-navs and a tepid recovery in
the auto industry.
Navigation devices - once a duopoly of Garmin and TomTom -
lost relevance as mapping apps became a standard feature on
Apple Inc's iPhones and phones powered by Google Inc's
Android operating system.
To counter the fall in sales, the companies charted
different strategies to sustain growth. TomTom focused on
mapping software, while Garmin, after a failed move to produce
its own phone, invested in products for niche markets such as
aviation, marine and fitness.
Garmin said on Wednesday it expects a profit of $2.50-$2.60
per share on revenue of $2.6-$2.7 billion for 2014. Analysts on
average were expecting a profit of $2.56 per share on revenue of
$2.58 billion, according to Thomson Reuters I/B/E/S.
Net income rose to $163.6 million, or 83 cents per share, in
the fourth quarter, from $129.3 million, or 66 cents per share,
a year earlier.
Excluding items, earnings were 76 cents per share, beating
the average analyst estimate of 62 cents.
Total sales fell 1 percent to $759.7 million, beating
average estimate of $712.8 million.
Garmin also said Chief Financial Officer Kevin Rauckman
would leave the company within the next year.
Shares of the Schaffhausen, Switzerland-based company were
up 9.8 percent at $51.80 Wednesday afternoon on the Nasdaq. The
stock has gained about 21 percent in the past year.
As of Tuesday's close, Garmin shares traded at a multiple of
18.6 times forward earnings, compared with TomTom's 20.6.
(Reporting by Soham Chatterjee; Editing by Saumyadeb