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Garmin (GRMN) to Report Q2 Earnings: What's in the Offing?

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Garmin Ltd. (GRMN - Free Report) is scheduled to report second-quarter 2019 results on Jul 31.

The company topped the Zacks Consensus Estimate in all the trailing four quarters, recording average of 19.76%.

In the last reported quarter, Garmin delivered a positive earnings surprise of 2.82%. First-quarter earnings of 73 cents per share were down 28.4% sequentially but up 7.4% year over year.

Increasing demand across fitness, outdoor, marine and aviation segments should continue to drive the company’s results.

Let’s see how things are shaping up for the to-be-reported quarter.

Garmin Ltd. Price and EPS Surprise


Portfolio Strength - Key Catalyst

Product portfolio expansion remains the top priority for Garmin. The company has been following a strategy of product introduction, acquisitions and strategic partnerships in this regard, which is anticipated to benefit the to-be-reported quarter as well.

The company operates in five organized segments — Outdoor, Fitness, Marine, Auto/Mobile and Aviation. A solid portfolio is expected to aid its performance across all segments in the second quarter.

The aviation segment could be a significant growth driver for the quarter to be reported. During the quarter, the company advanced G5000 integrated flight deck for crew-flown business jets for use in Textron Aviation’s Citation Excel and Citation XLS jets. This is a testament to its focus on strengthening portfolio. Further, it launched two new eLearning courses familiarize pilots of Citation Excel/XLS with capabilities of the G5000.

We believe these efforts will strengthen Garmin’s aviation business and expand top-line growth.

Its expanding portfolio of wearables and focus on the healthcare market are major positives for the fitness segment.

During the second quarter, the company partnered with Blue Cross Blue Shield (BCBS) Association’s wellness program, namely Blue365, allowing BCBS members to have an access to the health metrics of Garmin wearable devices.

All these factors are expected to drive its top-line growth in the soon-to-be-reported quarter.

However, weak personal navigation device (PND) market remains a headwind for Garmin’s Auto/Mobile segment.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Garmin currently holds a Zacks Rank #3 and has an Earnings ESP of 0.00%, which makes surprise prediction difficult.

Stocks That Warrant a Look

Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Groupon, Inc. (GRPN - Free Report) has an Earnings ESP of +25.00% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grubhub Inc. (GRUB - Free Report) has an Earnings ESP of +12.04% and a Zacks Rank #3.

Waters Corporation (WAT - Free Report) has an Earnings ESP of +0.59% and holds a Zacks Rank #3.

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Groupon, Inc. (GRPN) - free report >>

Grubhub Inc. (GRUB) - free report >>

Garmin Ltd. (GRMN) - free report >>

Waters Corporation (WAT) - free report >>