Garmin sees revenue at low end of market view

By Purwa Naveen Raman

BANGALORE (Reuters) - Personal navigation device maker Garmin Ltd (GRMN.O: Quote, Profile, Research, Stock Buzz) gave revenue forecasts at the low end of market expectations, sending its shares and those of rival TomTom plunging.

The company is battling competition from TomTom NV (TOM2.AS: Quote, Profile, Research, Stock Buzz), lower average selling prices and decreased spending power of the U.S. consumer.

In an interview with Reuters, Chief Financial Officer Kevin Rauckman said first-quarter revenue is expected to drop between 40 percent and 50 percent from the previous quarter, when sales were boosted by holiday spending.

A 40 percent to 50 percent revenue fall would imply first-quarter revenue of $615 million to $738 million.

In February, Garmin had said its fourth-quarter revenue doubled to $1.23 billion from a year ago, but warned that margins in 2008 would be squeezed especially in its vehicle and mobile business.

Analysts were expecting first-quarter revenue of $731.2 million, according to Reuters Estimates.

Shares of the company fell 11 percent in trading before the bell to $50.11. TomTom's shares were down 5.6 percent at 25.25 euros, while those of mapmaker Tele Atlas (TA.AS: Quote, Profile, Research, Stock Buzz) were down 2.3 percent to 24.07 euros, both in Amsterdam.

Garmin is locked in an intense battle to capture market share in the PND market and is looking to expand its presence in Europe, a stronghold of Dutch company TomTom.