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Garmin's (GRMN) Q4 Earnings & Sales Beat Estimates, Up Y/Y
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Garmin Ltd. (GRMN - Free Report) reported fourth-quarter 2023 pro-forma earnings of $1.72 per share, beating the Zacks Consensus Estimate by 22.9%. The bottom line improved 27.4% on a year-over-year basis.
Net sales were $1.48 billion, which surpassed the Zacks Consensus Estimate by 5.6% and increased 13% from the year-ago quarter’s figure.
The year-over-year growth in the top line was attributed to strength in the Outdoor, Fitness and Marine segments. The growing Auto OEM segment contributed well.
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.
Outdoor (32.8% of net sales): The segment generated sales of $486.3 million in the reported quarter, increasing 7.7% year over year with growth across multiple categories led by adventure watches.
During the quarter, Garmin expanded its lineup of dive offerings with the introduction of the Descent G1 Solar – Ocean Edition, the company’s first-ever product made with recycled ocean-bound plastics. GRMN also launched the new Descent Mk3 watch-style dive computer and the Descent T2 transceiver with enhanced SubWave sonar technology.
Fitness (27.8%): The segment generated sales of $412.07 million, which increased 22.4% from the year-ago quarter’s level, owing to solid demand for the company’s advanced wearables.
Marine (16.2%): Garmin generated sales of $239.8 million from the segment, increasing 13.9% on a year-over-year basis due to contributions from the acquisition of JL Audio.
During the quarter, Garmin launched the ECHOMAP TM Ultra 2 chartplotter series designed with premium sonar, mapping and wireless networking capabilities for inland and nearshore anglers. GRMN also launched the GSD 28 sonar module with RapidReturn technology that offers six times faster updates than its predecessor.
Aviation (14.7%): The segment generated sales of $217.13 million, decreasing 3.6% on a year-over-year basis as growth in OEM categories was more than offset by decreases in aftermarket categories.
Auto OEM (8%): The segment generated sales of $127.02 million, up 54% from the prior-year quarter’s level, primarily due to increased shipments of domain controllers.
Operating Results
In the fourth quarter, the gross margin was 58.3%, which contracted 130 basis points (bps) from the year-ago period’s level.
Garmin’s operating expenses of $523.6 million were up 9.6% from the prior-year quarter’s level. As a percentage of revenues, the figure contracted 120 bps year over year to 35.3%.
The operating margin was 23% in the reported quarter, which expanded 250 bps year over year.
Balance Sheet & Cash Flow
As of Dec 30, 2023, cash, cash equivalents and marketable securities were $3.1 billion, up from $2.8 billion as of Oct 1, 2023.
In the fourth quarter of 2023, Garmin generated an operating cash flow of $466 million and a free cash flow of $417 million.
The company paid a quarterly dividend of approximately $140 million and repurchased approximately $19 million of the company’s shares within the quarter, completing the share repurchase program authorized through Dec 29, 2023.
2024 Guidance
GRMN expects 2024 revenues to be $5.75 billion, indicating growth of 10% year over year. The Zacks Consensus Estimate for 2024 net sales is pegged at $5.55 billion.
The company expects pro-forma earnings of $5.40 per share. The consensus mark for 2024 earnings is pegged at $5.50 per share.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2024 earnings has been revised upward by a penny to $2.95 per share in the past 30 days, suggesting year-over-year growth of 91.6%. The long-term estimated earnings growth rate for the stock is 36.1%. Shares of CRWD have surged 187.9% over the past year.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 39 cents to $4.03 per share in the past 30 days, indicating an increase of 39% on a year-over-year basis. The long-term expected earnings growth rate for the stock is 28.1%. AMZN stock has returned 76.6% over the past year.
The consensus mark for Meta’s 2024 earnings has been revised upward by 10.8% to $19.62 per share over the past 30 days, indicating a 31.9% increase from 2023. It has a long-term earnings growth expectation of 19.5%. In the trailing 12 months, META stock has surged 174.1%.
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Garmin's (GRMN) Q4 Earnings & Sales Beat Estimates, Up Y/Y
Garmin Ltd. (GRMN - Free Report) reported fourth-quarter 2023 pro-forma earnings of $1.72 per share, beating the Zacks Consensus Estimate by 22.9%. The bottom line improved 27.4% on a year-over-year basis.
Net sales were $1.48 billion, which surpassed the Zacks Consensus Estimate by 5.6% and increased 13% from the year-ago quarter’s figure.
The year-over-year growth in the top line was attributed to strength in the Outdoor, Fitness and Marine segments. The growing Auto OEM segment contributed well.
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.
Garmin Ltd. Price, Consensus and EPS Surprise
Garmin Ltd. price-consensus-eps-surprise-chart | Garmin Ltd. Quote
Segmental Details
Outdoor (32.8% of net sales): The segment generated sales of $486.3 million in the reported quarter, increasing 7.7% year over year with growth across multiple categories led by adventure watches.
During the quarter, Garmin expanded its lineup of dive offerings with the introduction of the Descent G1 Solar – Ocean Edition, the company’s first-ever product made with recycled ocean-bound plastics. GRMN also launched the new Descent Mk3 watch-style dive computer and the Descent T2 transceiver with enhanced SubWave sonar technology.
Fitness (27.8%): The segment generated sales of $412.07 million, which increased 22.4% from the year-ago quarter’s level, owing to solid demand for the company’s advanced wearables.
Marine (16.2%): Garmin generated sales of $239.8 million from the segment, increasing 13.9% on a year-over-year basis due to contributions from the acquisition of JL Audio.
During the quarter, Garmin launched the ECHOMAP TM Ultra 2 chartplotter series designed with premium sonar, mapping and wireless networking capabilities for inland and nearshore anglers. GRMN also launched the GSD 28 sonar module with RapidReturn technology that offers six times faster updates than its predecessor.
Aviation (14.7%): The segment generated sales of $217.13 million, decreasing 3.6% on a year-over-year basis as growth in OEM categories was more than offset by decreases in aftermarket categories.
Auto OEM (8%): The segment generated sales of $127.02 million, up 54% from the prior-year quarter’s level, primarily due to increased shipments of domain controllers.
Operating Results
In the fourth quarter, the gross margin was 58.3%, which contracted 130 basis points (bps) from the year-ago period’s level.
Garmin’s operating expenses of $523.6 million were up 9.6% from the prior-year quarter’s level. As a percentage of revenues, the figure contracted 120 bps year over year to 35.3%.
The operating margin was 23% in the reported quarter, which expanded 250 bps year over year.
Balance Sheet & Cash Flow
As of Dec 30, 2023, cash, cash equivalents and marketable securities were $3.1 billion, up from $2.8 billion as of Oct 1, 2023.
In the fourth quarter of 2023, Garmin generated an operating cash flow of $466 million and a free cash flow of $417 million.
The company paid a quarterly dividend of approximately $140 million and repurchased approximately $19 million of the company’s shares within the quarter, completing the share repurchase program authorized through Dec 29, 2023.
2024 Guidance
GRMN expects 2024 revenues to be $5.75 billion, indicating growth of 10% year over year. The Zacks Consensus Estimate for 2024 net sales is pegged at $5.55 billion.
The company expects pro-forma earnings of $5.40 per share. The consensus mark for 2024 earnings is pegged at $5.50 per share.
Zacks Rank and Stocks to Consider
Currently, Garmin carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Zacks Computer and Technology sector are CrowdStrike Holdings (CRWD - Free Report) , Amazon.com (AMZN - Free Report) and Meta Platforms (META - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2024 earnings has been revised upward by a penny to $2.95 per share in the past 30 days, suggesting year-over-year growth of 91.6%. The long-term estimated earnings growth rate for the stock is 36.1%. Shares of CRWD have surged 187.9% over the past year.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 39 cents to $4.03 per share in the past 30 days, indicating an increase of 39% on a year-over-year basis. The long-term expected earnings growth rate for the stock is 28.1%. AMZN stock has returned 76.6% over the past year.
The consensus mark for Meta’s 2024 earnings has been revised upward by 10.8% to $19.62 per share over the past 30 days, indicating a 31.9% increase from 2023. It has a long-term earnings growth expectation of 19.5%. In the trailing 12 months, META stock has surged 174.1%.