OLATHE, Kan. (BRAIN) — Garmin Ltd. on Wednesday reported a 4 percent jump in fourth-quarter revenue, to $932 million, as the company's aviation, marine, outdoor and fitness businesses grew a collective 13 percent compared with a year earlier. Revenue for the full year rose 7 percent to $3.35 billion.
The results handily beat Wall Street expectations, and shares of Garmin surged on the news.
"2018 was another remarkable year of revenue and operating income growth driven by strong performance in our aviation, marine, outdoor and fitness segments," Garmin president and CEO Cliff Pemble said in a release. "Entering 2019, we see many opportunities ahead and believe that we are well positioned to seize these opportunities with a strong lineup of products across all of our segments."
Garmin's fitness business, which includes its cycling products, saw revenue grow 13 percent on increased sales across all product categories. Looking to 2019, Garmin is projecting a 13 percent in fitness sales due to both organic growth and contributions from the company's pending acquisition of Dutch indoor smart trainer company Tacx announced last week.
During a conference call with analysts Wednesday, Pemble said about half the projected fitness growth in 2019 is due to the Tacx acquisition, expected to close sometime during the second quarter of this year.
"We've built a very solid cycling business based on outdoor cycling activities, so Tacx allows to bring cycling indoors and integrate across our platforms both in terms of head units as well as Garmin Connect (the company's online fitness community). We see a lot of opportunities and synergies that we can work together with Tacx to better serve the overall cycling market," he said.
Pemble noted that Garmin anticipates to continue distribution of Tacx products through the brand's existing sports retailers, while also expanding distribution in the U.S. and Asia.
"Already the product is available through REI, but there's opportunity to expand Tacx distribution in the U.S. and Asia markets. They're very strong in Europe but less strong in the U.S. and Asia, so we'll be working to expand that distribution," he said.
For full-year 2019, Garmin said it expects revenue to reach $3.5 billion, with double-digit growth projected in all business segments except for automotive, where revenue is expected to fall 18 percent.
