Activity tracker, camera boost Garmin's 4Q profit
NEW YORK (AP) — Garmin Ltd. is changing directions. The maker of personal navigation devices, which have fallen out of favor with customers, said that activity trackers and video cameras used for action sports will help drive its future growth.
The Swiss company reported fourth-quarter results Wednesday that beat Wall Street expectations, and its shares jumped to a five-year high. Its board also plans to propose an annual dividend of $1.92 for the new year, up from $1.80 this year. Shareholders will vote in June.
Garmin has seen demand for its car navigation devices fall as more consumers use their smartphones for driving directions. To combat this, Garmin launched a waterproof action video camera called Virb last year which helped boost its fourth quarter profit. Vivofit, a fitness band that monitors hearth rate, calories burned and steps walked, also helped its results.
The company said that its net income rose to $163.6 million, or 83 cents per share, in the quarter ending Dec. 28, up from $129.3 million, or 66 cents per share, a year earlier.
Adjusted to remove one-time charges, the company reported earnings of 76 cents per share. That's above the 60 cents per share analysts expected, according to FactSet.
Revenue slipped 1.2 percent to $759.7 million from $768.5 million, above the $708.3 million analysts expected. Revenue of its automotive and mobile navigation devices fell 12 percent to $382.5 million. Revenue from its outdoor, aviation, fitness and marine businesses all rose. Those businesses also made up about 50 percent Garmin's fourth-quarter revenue, up 14 percent from a year ago.
Garmin shares rose $4.57, or 9.7 percent, to $51.74 in afternoon trading Wednesday after climbing as high as $52.72 earlier in the day, their highest point since April 2008.