Garmin reports 5% year-on-year rise in revenue to $812m in Q216
Picture credit: Garmin
Garmin has announced its results for the second quarter ended June 25, 2016, with revenue growing 5% year-on-year to $812 million.
Gross margin expanded to 57.0% compared to 54.2% in the prior year quarter, and operating margin expanded to 24.7% compared to 21.5% in the prior year quarter. GAAP EPS grew 18% year-on-year to $0.85 while pro forma EPS grew 21% year-on-year to $0.87.
Cliff Pemble, president and chief executive officer of Garmin, said: “We achieved strong results in the second quarter of 2016 with each business segment delivering solid performance. Fitness and outdoor achieved impressive revenue and profit growth driven by our strengthening position in the wearables market. Aviation and marine also delivered revenue and profit growth while auto remains a solid base of profit contributions to the overall business. I am pleased with our performance in the first half of 2016 which gives us confidence to raise our guidance for the full year.”
The fitness segment saw a 34% year-on-year increase in revenue on account of wearable devices. Gross margin was in line with the prior year at 56% while operating margin increased to 25% from 21% in the prior year. During the quarter, the company initiated deliveries of the vivoactive HR and vivofit 3 activity trackers as well as the Forerunner 735XT, a lightweight multi-sport-capable running watch, the vivosmart HR +, our smart activity tracker with GPS, and vivomove, a fashionable analog watch with activity tracking features and a one year battery life.
Meanwhile, the auto segment saw an 18% decline in revenue on account of contraction of the personal navigation device (PND) market, and challenges caused by additional revenue deferrals associated with auto OEM products. Gross and operating margins increased to 46% and 16%, respectively. The company continues to make headway in business with automakers as seen at the 2016 Beijing Auto Show with the factory-installed Original Equipment Digital Video Recorder (OE DVR) solution in the new Peugeot 3008.