CAYMAN ISLANDS – While Garmin Ltd. (Nasdaq: GRMN) reported a record first quarter 2007 with revenue and earnings per share growing more than 50 percent, its marine segment revenue decreased 15 percent to $43 million, compared to the same quarter of last year.
“Timing of new marine product introductions resulted in lower first quarter revenues for this segment, and pushed traditional ‘marine season’ revenues into the second and third quarters this year,” said CFO Kevin Rauckman in a statement.
The company said the new marine products it delivered during the quarter were “geared to enhance our position” in the marine market.
“The first quarter was an exciting quarter for Garmin,” said Dr. Min Kao, Garmin chairman and CEO. “We are pleased to have delivered numerous new automotive and marine products, which have been received with enthusiasm by the market and we are ramping up production to meet the upcoming spring season. We continued to experience strong sales of automotive/mobile products in this seasonally slower quarter, and look forward to a healthy second quarter, spurred by consumer interest in our revolutionary new marine product line, and our new and existing automotive/mobile products group, which are both very popular segments this time of year.”
Kao also indicated that consumers’ response to its new marine products and cartography has been very positive, “with strong initial orders and backlogs for radar, 400- and 500-series products delivered in March 2007. Our soon-to-be-delivered 4000- and 5000-series products have generated much enthusiasm, and we anticipate strong orders for these products as well,” he added.
“Both our outdoor/fitness and marine segments experienced gross margin declines when compared with the year-ago quarter, as product mix reflected the discounting of older products, particularly in the marine segment,” Rauckman commented. “Operating margins declined in our marine and outdoor/fitness segments when compared with the year-ago quarter.”
“We believe the marine segment is positioned to meet our 2007 guidance for this segment, however this will happen through strong sales in both second and third quarters due to the timing of new product introductions,” said Kao. “We are also very pleased with our recent acquisition of the assets of Nautamatic Marine Systems, Inc. whose innovative, patented marine autopilot technology will allow us to further expand our suite of marine networking products.”
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