* 4th-quarter adjusted earnings/shr $0.68 vs estimate $0.73
* 4th-quarter revenue $910 million vs estimate $833.4
* Sees FY13 adjusted earnings/shr $2.30-$2.40 vs estimate
* Shares fall as much as 12 pct
(Adds details from conference call, updates share movement)
By Sayantani Ghosh
Feb 20 Garmin Ltd said it expects to
sell fewer GPS-enabled navigation devices in 2013 and forecast
full-year results below analysts' estimates, sending its shares
down 12 percent to their lowest in more than a year.
Revenue from the company's struggling automotive mobile
business, which makes hand-held and car-mounted navigation
devices that account for about half of its sales, is expected to
fall 15 to 20 percent in 2013, the company said on a conference
call with analysts.
Garmin expects to sell about 20 percent fewer personal
navigation devices in 2013, suggesting that the company is no
longer able to compensate for the overall decline in demand for
the gadgets by grabbing market share from smaller rivals.
The No. 1 U.S. navigation device maker has been trying to
fight sluggish demand for these once must-have gadgets by
bundling them with high-margin specialized mapping services as
smartphones loaded with free mapping apps invade its market.
The drop in the popularity of personal navigation devices
has forced Garmin, which reported fourth-quarter profit below
market estimates on Wednesday, and its Dutch rival TomTom
to look for new areas of growth. While Garmin focused
on its fitness and outdoor products, TomTom invested in software
TomTom said last week that earnings would halve this year
because of weak sales of devices for cars and competition from
providers of free maps.
Garmin shares have risen 3 percent since it reported
third-quarter results on Oct. 31, slightly better than the 2.5
percent rise in an index of 697 technology equipment makers
globally tracked by Thomson Reuters. TomTom has fallen 5 percent
in that time.
Garmin said it expects full-year profit of $2.30 to $2.40
per share, excluding items, and revenue of $2.5 billion to $2.6
Analysts on average were expecting adjusted income of $2.82
per share and revenue of $2.76 billion, according to Thomson
FOURTH-QUARTER RESULTS MISS
Net profit fell to $129.3 million, or 66 cents per share in
the fourth quarter, from $165.6 million, or 85 cents per share,
a year earlier.
Excluding items, the company earned 68 cents per share.
The Swiss company had said in October that
greater-than-usual advertising expenses in the holiday season
could be a drag on fourth-quarter profit.
Sales at Garmin's automotive/mobile business slipped to $437
The company's outdoor business, which makes things like
dog-tracking and golf gadgets, fell 2 percent to $119 million in
the fourth quarter, while revenue from its fitness business that
makes gadgets such as GPS-enabled watches to count calories and
monitor heart beats, rose 10 percent to $104 million.
Total revenue fell 16 percent to $910 million.
Analysts on average had expected an adjusted profit of 73
cents per share, on revenue of $833.4 million.
Garmin shares were at $34.65 in midday trading on the
(Additional reporting by Savio D'Souza in Bangalore; Editing by
Supriya Kurane and Sreejiraj Eluvangal)