Double-digit growth in the marine helps drive strong results

Garmin Ltd. ended the first quarter of 2019 with record revenue of US$766 million, an 8% increase for the period, led by double-digit growth in the marine, aviation fitness and outdoor products of 12% over the prior year.

Gross margins of 59% and operating margins of 19.8% were off fractionally from the previous year, with operating income jumping 6% for the quarter to US$151 million. Diluted earnings per share (EPS) was 74-cents and pro forma diluted EPS was 73-cents, up 7% from the prior year.

“We are optimistic as we enter the important mid-year selling season. Our product portfolio is very strong, bolstered by recent introductions, with more to come throughout the remainder of the year,” said President and CEO Cliff Pemble in the company’s earnings news release.

Garmin’s marine segment grew the most at 18% driven by strong demand for its chart plotters and sonars. Gross margins were 58% while operating margins were 19 percent. The company notes that during the quarter it was named 2018 Supplier of the Year by Independent Boat Builders, Inc.

Total operating expenses in the quarter were US$300 million, a 6% increase from the prior year. Research and development increased 3%, primarily due to engineering personnel costs. Selling, general and administrative expenses increased 8%, primarily due to increased legal related costs and personnel costs. Advertising increased 9%, driven primarily by higher spend in the outdoor and marine segments.