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Garmin revenues up; power meter delayed

Published August 1, 2012

SCHAFFHAUSEN, Switzerland (BRAIN)—Sales in the outdoor and fitness markets helped lead Garmin, Ltd. to a 7 percent increase in total revenue in its second quarter, to $718 million.

In a conference call with investors after the announcement, Garmin executives said the Vector, a long-promised pedal-based power meter, is expected to be ready by year's end.

"We have been extensively testing working prototypes that we've been building," said Clifton Pemble, president, director and COO of Garmin International Inc,. "And at the time, we weren't happy with the consistency and the overall performance that we were seeing. So we are doing some design changes and starting to assemble new prototypes now, and we would expect that by the end of the year we should have a solid power meter."

"It's a highly sensitive measuring instrument, and so integrating that into the bike and achieving some of the innovations that we're working on here has been challenging, but something that we're able to knock off the problems one by one," he continued.

Garmin's cycling products are tracked as part of the company's fitness product category, which saw a 5 percent revenue increase to $82 million for the quarter. In a statement about its first quarter performance, Garmin did not mention its cycling products but noted that its Forerunner running units sold well in the quarter and that it is making a new push into the swimming market with the Garmin Swim, introduced in June.

The company also noted that its margins in the fitness division increased in the quarter due to the introduction of new products that replaced products that were at the end of their life cycle.

The outdoor division saw the biggest gains in the quarter, climbing 24 percent to $100 million. Garmin's automotive and mobile segment remains its largest money maker, however, and saw an 8 percent increase to $392 million.

All together, the company sold 3.9 million units in the quarter, up 4 percent.

Operating margin increased year‐over‐year to 28 percent, compared to 20 percent in the second quarter 2011; earnings per share increased 70 percent to $0.95 from $0.56 in second quarter 2011.

Garmin has its corporate headquarters in Switzerland; its U.S. base is in Olathe, Kansas. The company trades on NASDAQ under the GRMN symbol.

Topics associated with this article: Earnings/Financial Reports

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