Worldwide provider of navigation, communications and information devices, Garmin Ltd. (GRMN - Analyst Report) has recently launched a remote-mount transponder, the GTX 3000. The new device satisfies the operational needs of transport category aircraft.
A transponder is an electronic device used to wirelessly receive and transmit electrical signals in aircraft. The device is mainly used for location, identification and navigation systems for commercial and private aircraft. Other applications include optical communications, aviation, marine, motorsport and in under-water equipment.
Garmin’s GTX 3000 transponder is sleeker and lighter, and fulfills the TSO/DO-260B compatibility requirements. It comes with higher transmitting power than the ones from others like Texas Instruments Inc. (TXN - Analyst Report). Garmin’s commitment in launching hi-tech products in aviation segment shows that this segment is up for rebound, which can be positive for Garmin going forward.
According to IBIS World, revenue for the Global Airlines industry is estimated to increase at a compounded annual growth rate (CAGR) of 2.8% from 2007-2012 to $633.0 billion. In addition, the Federal Aviation Administration (FAA) expects the number of commercial aircraft being produced to increase from 7,096 in 2010 to 10,523 in 2031, an average annual growth rate of 1.9% or 163 aircraft annually.
Garmin is well positioned in the aviation market, although recessionary pressures have affected this business. Garmin has continued with its product launches right through the year, including the GTN TM 650 and 750 series touchscreen-controlled integrated VHF navigation receiver, G1000H TM integrated glass flight deck system, and aera 795 and 796 touchscreen portable aviation navigation devices among others.
In the first quarter of fiscal 2012, Garmin’s revenue from the aviation segment was $73.0 million (13.0% of revenue), up 2.1% sequentially and 5.4% year over year.
Currently, Garmin Ltd. has a Zacks #4 Rank, implying a short-term ‘Sell’ rating.