Did anyone else see this article in the WSJ?
The company said its fiscal fourth-quarter net income dropped 49% on falling revenue and margins, despite selling a higher number of GPS devices in the holiday period, which ended Dec. 27.
Consumers' cutbacks in discretionary spending means they aren't buying big-ticket items such as Garmin's GPS devices, and manufacturers are resorting to aggressive price discounting.
Garmin's quarterly revenue decreased 14% to $1.05 billion, while its number of units sold rose 15% to 6.4 million. Amid the woes, the company said it wouldn't give a 2009 forecast because of market uncertainty.
Chief Executive Min Kao said Garmin continued to experience a "challenging" environment in the fourth quarter, with many trends worsening. He said the market for navigation devices has slowed, but the company still saw unit growth in North America and the Asia-Pacific region.
Garmin posted net income of $157.7 million, or 78 cents a share, down from $307.3 million, or $1.39 a share, a year earlier. Excluding currency fluctuations, earnings fell to 93 cents from $1.31.
It also reduced inventory by $274 million as it scaled back production to match demand. The company added that it eliminated overtime labor and contract workers within its Taiwan factories.
In a contrast to the third-quarter's double-digit gains for most of the company's businesses, revenue at the company's major segments was mixed. The outdoor and fitness segment rose 5%, while the automotive and mobile business fell 17%. Marine revenue was flat, and Mr. Kao said Garmin expects 2009 to be a "very difficult year for the marine industry."
Garmin's quarterly revenue decreased 14% to $1.05 billion, while its number of units sold rose 15% to 6.4 million.
If my calculator is right that equates to a per unit price of $164, not accounting for non-unit revenue such as maps etc.
Either some middleman is making a mint or I got seriously ripped!
I voting that it was a middleman rip. Then again looking at Garmin's web prices it's probably both.
In this economy I would think that a lot of Companies would love to have a net operating income of 157.7 million dollars for last year. Being they sold about 16 million units in 2008 that is only a average profit of about $10 a unit.
I'm sure TomTom would have been ecstatic about having a net income instead of the $1.3 billion net operating loss they just posted for 2008.
It would be interesting to know how some of the other GPS manufacturers like Mio, Magellan, Nextar or Navigon did last year but none of them have posted anything on sales figures or income for 2008 that I have seen anywhere.
Their mobile business only fell 17%...
Most of the auto manufacturers would love for business to be only that bad!
Garmin has a tightly integrated manufacturing and distribution system. They keep bringing out new models, refreshing their line (which makes life more difficult on the competition). They also have good brand recognition.
Last year when I got a new car, I was faced with the decision -- spend $200 on a handheld GPS, or $2k on the OEM built-in. I went with the handheld, and I'm glad I did -- and so should Garmin, because I ended up getting another one for my son!
I won a Nuvi 260W from work as an outstanding aceivement award. I liked it so much I gave it to my wife (such generosity) and bought a 760 for myself. I hope that helped them bit. I'd like to see them around for a long time. I won't need one for several years, but I'm already planning to make my next GPS purchase a Garmin.
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