OLATHE, Kan. (BRAIN) — Shares of Garmin Ltd. soared to a five-year high Wednesday after the company reported that fourth-quarter earnings rose 27 percent on record sales in its outdoor, fitness, aviation and marine segments.
Garmin announced a quarterly profit of $163.6 million, compared with $129.3 million a year earlier. Profit for the full year came in at $1.41 billion, off 2 percent.
Garmin’s fitness sales rose 14 percent to $118.6 million for the quarter and increased by 11 percent to $356.3 million for the full year. In a conference call Wednesday, Garmin president and CEO Cliff Pemble said running and cycling were strong growth engines with the introduction of new Edge cycling computers and Forerunner watches during the year. The company also expanded its role in cycling with the launch of the Vector power meter, he added.
“The return to double-digit growth in the second half of 2013 gives us confidence that the fitness market remains underpenetrated and that our products continue to be well-positioned from a competitive perspective,” Pemble said.
Looking ahead, Garmin targets fitness revenue growth of 10 to 15 percent for 2014 after entering the emerging activity-monitor market with the Vivofit and Vivoki monitors, as well as on new product introductions for running, cycling and multi-sport.
Outdoor revenue rose 7 percent to $126.6 million for the quarter and ended the year up 2 percent at $411 million. Highlights for the year included the introduction of Garmin’s first action cameras, the VIRB and VIRB Elite. The company is targeting 2014 revenue growth for outdoor of 10 to 15 percent as it looks to grow market share in action cams, golf products and dog tracking and training devices.
Aviation was Garmin’s strongest gainer for both the quarter and year, with revenue up 25 percent and 16 percent, respectively, on strength in both OEM and aftermarket sales.
The company’s automotive and mobile business continues to struggle, with sales off 12 percent for the quarter and down 13 percent for the year as the market for personal navigation devices erodes amid the proliferation of smartphone GPS apps. For 2014, Garmin expects revenue for the segment to decline 10 to 15 percent.
Garmin also announced Wednesday that, after 15 years with the company, CFO and treasurer Kevin Rauckman will step down within the next year.
“My tenure at Garmin has been extremely rewarding, and I have enjoyed working with so many dedicated and talented colleagues,” Rauckman said. “I intend to support Garmin during this period of transition then look forward to pursuing other life goals thereafter.”
Garmin trades on the Nasdaq Stock Market under the symbol GRMN. Its stock performance is tracked on BRAIN’s Industry Stock Chart.
