We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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 Q3 Earnings Beat: Will Upbeat Guidance Lift the Stock?
Read MoreHide Full Article
Garmin Ltd. (GRMN - Free Report) reported third-quarter 2024 pro forma earnings of $1.99 per share, beating the Zacks Consensus Estimate by 36.3%. The bottom line improved 41% on a year-over-year basis.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net sales were $1.58 billion, which surpassed the Zacks Consensus Estimate of $1.44 billion. The figure increased 24.1% from the year-ago quarter.
Year-over-year growth in the top line was attributed to the solid momentum across Outdoor, Fitness, Aviation, Marine and Auto OEM segments.
Buoyed by strong top-line and bottom-line performances, Garmin raised its earnings guidance range for the full year. The better-than-expected third-quarter results, along with upbeat guidance, can give a fresh boost to Garmin’s share price. Shares of GRMN have soared 59.5%, outperforming the Zacks Electronics - Miscellaneous Products industry’s decline of 16%.
Outdoor (33.2% of Net Sales): The segment generated sales of $526.6 million in the reported quarter, up 21% year over year, driven by growth in Garmin’s adventure watches.
Fitness (29.2%): The segment generated sales of $463.8 million, which increased 31% from the year-ago quarter, owing to solid demand for the company’s wearables.
Aviation (12.9%): The segment generated sales of $204.6 million, up 3% on a year-over-year basis. This was driven by the solid momentum in the aftermarket product categories.
Marine (14%): Garmin generated sales of $222.2 million from the segment, up 22% on a year-over-year basis. This was driven by benefits from the JL Audio buyout.
Auto OEM (10.6%): The segment generated sales of $168.7 million, up 53% from the prior-year quarter. This was primarily attributed to growing shipments of domain controllers.
Operating Results
In the third quarter, the gross margin was 60%, which expanded 300 basis points (bps) from the year-ago period.
Garmin’s operating expenses of $514 million grew 12% from the prior-year quarter due to rising personnel costs in research and development and sales and marketing. As a percentage of revenues, the figure contracted 350 bps year over year to 34.6%.
The operating margin was 27.6% in the reported quarter, which expanded 640 bps year over year.
Balance Sheet & Cash Flow
As of Sept. 28, 2024, cash, cash equivalents and marketable securities were $2.42 billion, up from $2.22 billion as of June 29, 2024.
In the third quarter of 2024, Garmin generated an operating cash flow of $258 million and a free cash flow of $219 million compared with the operating cash flow of $255 million and a free cash flow of $218 million reported in the prior quarter.
The company paid out a quarterly dividend of $144 million and repurchased $20 million of shares in the reported quarter.
2024 Guidance
Garmin has raised its 2024 revenue guidance from $6.12 billion to $5.75 billion. The Zacks Consensus Estimate for 2024 net sales is pegged at $6 billion.
The company has also revised the pro-forma earnings per share guidance upward from $6 to $6.85. The consensus mark for 2024 earnings is pegged at $6.09 per share.
It expects gross margin, operating margin and tax rate to be 58.5%, 24% and 16.5, respectively.
The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 34.5% in the year-to-date period.
The Zacks Consensus Estimate for FFIV’s fiscal 2024 earnings has been revised upward by 3 cents to $14.03 per share in the past 30 days, suggesting a year-over-year increase of 5%. It has a long-term earnings growth expectation of 7.8%. Shares of FFIV have plunged 33.5% in the year-to-date period.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Garmin Q3 Earnings Beat: Will Upbeat Guidance Lift the Stock?
Garmin Ltd. (GRMN - Free Report) reported third-quarter 2024 pro forma earnings of $1.99 per share, beating the Zacks Consensus Estimate by 36.3%. The bottom line improved 41% on a year-over-year basis.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net sales were $1.58 billion, which surpassed the Zacks Consensus Estimate of $1.44 billion. The figure increased 24.1% from the year-ago quarter.
Year-over-year growth in the top line was attributed to the solid momentum across Outdoor, Fitness, Aviation, Marine and Auto OEM segments.
Buoyed by strong top-line and bottom-line performances, Garmin raised its earnings guidance range for the full year. The better-than-expected third-quarter results, along with upbeat guidance, can give a fresh boost to Garmin’s share price. Shares of GRMN have soared 59.5%, outperforming the Zacks Electronics - Miscellaneous Products industry’s decline of 16%.
Garmin Ltd. Price, Consensus and EPS Surprise
Garmin Ltd. price-consensus-eps-surprise-chart | Garmin Ltd. Quote
Segmental Details
Outdoor (33.2% of Net Sales): The segment generated sales of $526.6 million in the reported quarter, up 21% year over year, driven by growth in Garmin’s adventure watches.
Fitness (29.2%): The segment generated sales of $463.8 million, which increased 31% from the year-ago quarter, owing to solid demand for the company’s wearables.
Aviation (12.9%): The segment generated sales of $204.6 million, up 3% on a year-over-year basis. This was driven by the solid momentum in the aftermarket product categories.
Marine (14%): Garmin generated sales of $222.2 million from the segment, up 22% on a year-over-year basis. This was driven by benefits from the JL Audio buyout.
Auto OEM (10.6%): The segment generated sales of $168.7 million, up 53% from the prior-year quarter. This was primarily attributed to growing shipments of domain controllers.
Operating Results
In the third quarter, the gross margin was 60%, which expanded 300 basis points (bps) from the year-ago period.
Garmin’s operating expenses of $514 million grew 12% from the prior-year quarter due to rising personnel costs in research and development and sales and marketing. As a percentage of revenues, the figure contracted 350 bps year over year to 34.6%.
The operating margin was 27.6% in the reported quarter, which expanded 640 bps year over year.
Balance Sheet & Cash Flow
As of Sept. 28, 2024, cash, cash equivalents and marketable securities were $2.42 billion, up from $2.22 billion as of June 29, 2024.
In the third quarter of 2024, Garmin generated an operating cash flow of $258 million and a free cash flow of $219 million compared with the operating cash flow of $255 million and a free cash flow of $218 million reported in the prior quarter.
The company paid out a quarterly dividend of $144 million and repurchased $20 million of shares in the reported quarter.
2024 Guidance
Garmin has raised its 2024 revenue guidance from $6.12 billion to $5.75 billion. The Zacks Consensus Estimate for 2024 net sales is pegged at $6 billion.
The company has also revised the pro-forma earnings per share guidance upward from $6 to $6.85. The consensus mark for 2024 earnings is pegged at $6.09 per share.
It expects gross margin, operating margin and tax rate to be 58.5%, 24% and 16.5, respectively.
Garmin’s Zacks Rank & Stocks to Consider
Garmin currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Shopify (SHOP - Free Report) , Fortinet (FTNT - Free Report) and F5 Inc (FFIV - Free Report) . While Shopify and Fortinet sport a Zacks Rank #1 (Strong Buy) each, F5 carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 34.5% in the year-to-date period.
The Zacks Consensus Estimate for FFIV’s fiscal 2024 earnings has been revised upward by 3 cents to $14.03 per share in the past 30 days, suggesting a year-over-year increase of 5%. It has a long-term earnings growth expectation of 7.8%. Shares of FFIV have plunged 33.5% in the year-to-date period.