We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Garmin (GRMN) Up 6.8% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Garmin (GRMN - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Garmin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Garmin's Q3 Earnings & Sales Beat Estimates, Up Y/Y
Garmin reported third-quarter 2023 adjusted earnings of $1.41 per share. The bottom line improved 14% on a year-over-year basis.
Net sales were $1.28 billion, which increased 12% from the year-ago quarter’s figure.
The year-over-year growth in the top line was attributed to strength in the Fitness and Auto OEM segments. The growing Aviation and Outdoor segments contributed well.
However, GRMN witnessed weak momentum in the Marine segment in the third quarter.
Garmin’s strong focus on continued innovation, diversification and market expansion to explore opportunities across all business segments remains a major positive. Its strong product lines are expected to aid its performance in the near term.
Segmental Details
Outdoor (34% of net sales): The segment generated sales of $433.99 million in the reported quarter, increasing 7% year over year due to strong demand in adventure watches.
Fitness (27.6%): The segment generated sales of $352.98 million, which increased 26% from the year-ago quarter’s level, owing to solid demand for the company’s advanced wearables.
Aviation (15.5%): The segment generated sales of $198.16 million, increasing 5% on a year-over-year basis. This was driven by solid momentum in OEM categories.
Marine (14.3%): Garmin generated sales of $182.25 million from the segment, decreasing 7% on a year-over-year basis. This was attributed to the unfavorable timing of promotions.
Auto OEM (8.6%): The segment generated sales of $110.15 million, up 59% from the prior-year quarter’s level. The growing shipment of domain controllers contributed well.
Operating Results
In the third quarter, the gross margin was 57%, which contracted 180 basis points (bps) from the year-ago period’s level.
Garmin’s operating expenses of $458.2 million were up 6% from the prior-year quarter’s level. As a percentage of revenues, the figure contracted 190 bps year over year to 35.9%.
The operating margin was 21.2% in the reported quarter, which contracted 20 bps year over year.
Balance Sheet & Cash Flow
As of Oct 1, 2023, cash, cash equivalents and marketable securities were $1.7 billion, up from $1.68 billion as of Jul 1, 2023.
The company generated a free cash flow of $312 million.
Garmin paid out dividends worth $140 million and repurchased shares worth $9 million in the reported quarter.
2023 Guidance
GRMN raised its guidance for 2023 revenues from $5.05 billion to $5.15 billion.
The company expects pro-forma earnings of $5.25 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Garmin has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Garmin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Garmin is part of the Zacks Electronics - Miscellaneous Products industry. Over the past month, Carrier Global (CARR - Free Report) , a stock from the same industry, has gained 4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Carrier Global reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of +5.1%. EPS of $0.89 for the same period compares with $0.70 a year ago.
For the current quarter, Carrier Global is expected to post earnings of $0.51 per share, indicating a change of +27.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Carrier Global. Also, the stock has a VGM Score of A.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Garmin (GRMN) Up 6.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Garmin (GRMN - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Garmin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Garmin's Q3 Earnings & Sales Beat Estimates, Up Y/Y
Garmin reported third-quarter 2023 adjusted earnings of $1.41 per share. The bottom line improved 14% on a year-over-year basis.
Net sales were $1.28 billion, which increased 12% from the year-ago quarter’s figure.
The year-over-year growth in the top line was attributed to strength in the Fitness and Auto OEM segments. The growing Aviation and Outdoor segments contributed well.
However, GRMN witnessed weak momentum in the Marine segment in the third quarter.
Garmin’s strong focus on continued innovation, diversification and market expansion to explore opportunities across all business segments remains a major positive. Its strong product lines are expected to aid its performance in the near term.
Segmental Details
Outdoor (34% of net sales): The segment generated sales of $433.99 million in the reported quarter, increasing 7% year over year due to strong demand in adventure watches.
Fitness (27.6%): The segment generated sales of $352.98 million, which increased 26% from the year-ago quarter’s level, owing to solid demand for the company’s advanced wearables.
Aviation (15.5%): The segment generated sales of $198.16 million, increasing 5% on a year-over-year basis. This was driven by solid momentum in OEM categories.
Marine (14.3%): Garmin generated sales of $182.25 million from the segment, decreasing 7% on a year-over-year basis. This was attributed to the unfavorable timing of promotions.
Auto OEM (8.6%): The segment generated sales of $110.15 million, up 59% from the prior-year quarter’s level. The growing shipment of domain controllers contributed well.
Operating Results
In the third quarter, the gross margin was 57%, which contracted 180 basis points (bps) from the year-ago period’s level.
Garmin’s operating expenses of $458.2 million were up 6% from the prior-year quarter’s level. As a percentage of revenues, the figure contracted 190 bps year over year to 35.9%.
The operating margin was 21.2% in the reported quarter, which contracted 20 bps year over year.
Balance Sheet & Cash Flow
As of Oct 1, 2023, cash, cash equivalents and marketable securities were $1.7 billion, up from $1.68 billion as of Jul 1, 2023.
The company generated a free cash flow of $312 million.
Garmin paid out dividends worth $140 million and repurchased shares worth $9 million in the reported quarter.
2023 Guidance
GRMN raised its guidance for 2023 revenues from $5.05 billion to $5.15 billion.
The company expects pro-forma earnings of $5.25 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Garmin has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Garmin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Garmin is part of the Zacks Electronics - Miscellaneous Products industry. Over the past month, Carrier Global (CARR - Free Report) , a stock from the same industry, has gained 4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Carrier Global reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of +5.1%. EPS of $0.89 for the same period compares with $0.70 a year ago.
For the current quarter, Carrier Global is expected to post earnings of $0.51 per share, indicating a change of +27.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Carrier Global. Also, the stock has a VGM Score of A.