Increases in both revenues and margins for the fourth quarter and full year driven by strong marine segment performance
Garmin ended both its 2018 fourth quarter and full fiscal year on a high note, reporting higher revenues, gross margins, operating margins and operating incomes driven in part by strong contributions from its marine segment.
The company reported total revenues of US$932m for the quarter ended December 29, 2018, marking a 4% year-over-year increase with growth within its aviation, marine, outdoor and fitness segments collectively increasing by 13% over the prior year quarter. Gross margin improved to 58.9% compared to 56.1% for Q4 2017, while operating margin improved to 23.9% compared to 20.4% for the previous period. Operating income was posted at $223m, representing 21% growth over the prior Q4, while total operating expenses were rreported as $326m, up by 2% over Q4 2017 levels.
Revenue from Garmin’s marine segment grew 13% in the quarter, with gross and operating margins improving to 58% and 9%, respectively on the strength of strong orders for 2019 product including the company’s flagship GPSMAP 8600 series with combined Garmin and Navionics chart content.
The strong Q4 performance capped an equally strong year for Garmin. Total revenues for fiscal year 2018 were reported as $3,347m, representing a 7% YOY increase, with aviation, marine, outdoor and fitness collectively increasing 16% over the previous year. Garmin reported gross margins of 59.1% compared to 57.6% for fiscal year 2017, while operating margin improved to 23.3% compared to 21.9% in the prior year. Reported operating income of $778m, represents 14% growth over the previous fiscal year.
The marine segment posted revenue growth of 18% for fiscal year 2018, marked by growth across multiple product categories, improving gross and operating margins to 59% and 14%, respectively. Operating income grew by 16% for the year, attributed to new OEM supplier exclusivity agreements and the launch of the company’s Panoptix Livescope product and new cartography. The company’s outlook for 2019 forecasts continued revenue growth in the 10% range built on market share gains.
“2018 was another remarkable year of revenue and operating income growth driven by strong performance in our aviation, marine, outdoor and fitness segments,” said Cliff Pemble, president and chief executive officer of Garmin Ltd. “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.”