(Reuters) - Navigation device maker Garmin Ltd’s (GRMN.O) quarterly profit trumped analysts’ estimates, boosted by strong demand for dog-tracking and golf gadgets, but raised its full-year forecast only modestly.
The company is fighting sluggish demand for its GPS-enabled handheld navigation devices by including high-margin specialized mapping services with them.
It has also bet on outdoor and fitness products to drive growth and reduce dependence on navigation devices as smartphones loaded with free mapping apps invade its market.
The 13-cent third-quarter profit beat translated into Garmin, known for conservative forecasts, raising its full-year profit outlook range by only 5 cents.
“This suggests that expectations for the fourth quarter might be lower than previously anticipated,” said Oppenheimer & Co analyst Yair Reiner.
He, however, added it was possible the company was just being conservative about its outlook as usual.
For the full year, Garmin now expects a per-share profit of $2.75 to $2.90, up from its earlier forecast $2.70 to $2.85.
Revenue from the company’s fitness business that makes gadgets used by athletes, such as GPS-enabled watches to count calories and monitor heart beats, slipped 6 percent in the quarter ended September 29.
This was the first-ever decline in revenue since it started reporting as a separate segment in 2011.
“Part of it appears to be the difficult comparisons to 2011 when the company had strong sales and some product introductions,” Oppenheimer’s Reiner said.
“But I think there could be some questions raised about whether that category is beginning to face competition from smartphones and other apps.”
The company’s Dutch rival, TomTom NV (TOM2.AS), trimmed its full-year revenue forecast on Tuesday, citing falling sales of its car navigation devices in Europe.
Garmin’s third-quarter profit fell to $140.3 million, or 72 cents per share from $150.4 million, or 77 cents per share, a year earlier.
Excluding one-time items, the company earned 74 cents per share. Total revenue rose 1 percent to $672 million.
Analysts on average had estimated earnings of 61 cents per share on revenue of $660.9 million, according to Thomson Reuters I/B/E/S.
Sales of Garmin’s outdoor products contributed 16 percent of the total and were up 11 percent at $105 million.
Reporting by Sayantani Ghosh in Bangalore; Editing by Sreejiraj Eluvangal