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Consumer demand for GPS tools, fitness devices drives Garmin earnings

An increasing consumer appetite for fitness trackers and GPS navigational tools led to robust and healthy sales and revenue for Garmin Ltd.

February 17, 2016

An increasing consumer appetite for fitness trackers and GPS navigational tools in the past quarter led to robust revenue for Garmin Ltd.

While net income dropped to $132.4 million, from $210.2 million, and net sales dropped 2.7 percent, the net sales beat analysts’ expectations of $760.1 million. The projected revenue of $2.82 billion was a bit higher than the $2.78 billion expected on the street.

Fitness device revenue, which accounts for 30 percent of overall business, jumped 13.6 percent for Q4. The news clearly resonated with shareholders as stock spiked 8.6 percent in Wednesday morning trading, according to a Reuters report. Prior the company’s stock had dropped 37 percent over the past 12 months.

"We believe these investments have paid off in improved top-line trends across the company's Forerunner, Vivoactive, and Vivofit product lines," Raymond James analyst Tavis McCourt said Tuesday, according to Reuters.

The aviation business revenue rose 11.6 percent but automotive revenue dipped 21 percent, which Garmin attributed to a dropping demand for personal navigation technology.