It's been one tough day for Garmin. The stock was hammered, down almost 22 percent to close at $35. 19, a drop of almost $10 in regular trading. Its quarterly earnings missed Wall Street's expectations, the company announced a delay of its smartphone and the outlook for the rest of the year will be, well, not as good as executives originally had hoped.
For the year, Garmin lowered expectations to revenue of $3.9 billion, down from $4.5 billion, and earnings per share of $4.13 instead of $4.40 per share. Analysts has been expecting earnings to exceed $4.03 per share on revenue of $4.13 billion, according to Reuters.
For the second quarter, Garmin reported revenue of $911.7 million, up from $742.5 million for the same period a year ago. Earnings were $256.1 million, or $1.19 per share, up from $214.3 million, or 98 cents per share, for the same quarter last year. Excluding adjustments, the company earned 92 cents a share, missing analysts' estimates of $1.01 a share, according to Reuters.
For the quarter, its biggest gains were in the North American region. And by segment, the biggest growth was in its Outdoor/Fitness segment. For the year, Europe and Asia were the gainers.
Blame the economy, consumer spending or the price of fuel, if you'd like. But even government stimulus checks won't send consumers into Best Buy for a portable GPS unit these days. Recognizing that, Garmin had plans to launch a smart phone of its own - called the nuvifone - but now has delayed it until next year. What's the hold up? Dealing with the wireless carriers, of course.
The field is gaining some competition in the form of GPS-enabled mobile phones. Even those that aren't GPS-enabled, those that are using mobile data plans and basic triangulation to estimate location seems to be a good-enough solution for now. Third-party mobile apps are offering mapping, directions, local business listings and even reviews. For every delay (this is the third), Garmin loses valuable time to tap into an increasingly crowded market.