CAYMAN ISLANDS – Reporting its third quarter results for the period ended Sept. 27, Garmin Ltd. said that despite a total revenue increase of 19 percent over the previous year’s quarter, from $729 million to $870 million, revenue for its marine segment decreased 8 percent, to $44 million in the quarter.
Revenue in the marine segment was flat at $171 million in year-to-date 2008, the company said.
“Our marine segment saw declining revenue for the second straight quarter on a year-over-year basis due to the severe impact on this industry of macroeconomic conditions and high fuel prices,” said Dr. Min Kao, chairman and CEO. “However, we continue to focus on innovation and on delivering a full suite of products to marine OEMs, including our new GHP10 autopilot which just recently began shipping and the VHF radios that were announced this month. Garmin’s diverse business composition allows us to endure the downturn in the boating industry while still making appropriate levels of research and development investment for the future.
“We are cognizant of the continued economic slowdown and business climate. As such, we are actively taking steps to manage our business appropriately. These include scaling our operations to better match current business conditions and changes to inventory planning that will allow us to reduce inventory levels by approximately $150 million by the end of the year. In addition, we will be more focused in our advertising spending as the economy and PND market change.”
Kevin Rauckman, Garmin’s chief financial officer said the company continues to believe that “a 55 percent gross margin is a sustainable target for the marine segment long-term.”
The company said it continues to believe its marine segment revenues will be flat in 2008.
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