KANSAS CITY, Mo. - Garmin Ltd. shares dropped almost 15 percent Wednesday after the navigational device maker said its second-quarter earnings missed Wall Street expectations, it forecast limited growth for the rest of the year and said it was delaying its entrance into the cell phone market.
Shares were down $6.64, or 14.8 percent, to $38.42 in late morning trading after dropping earlier to a 52-week low of $37.69.
The Cayman Islands-based company, with headquarters in Olathe, Kan., said it earned $256.1 million, or $1.19 per share, during the quarter, compared with $742.5 million, or 98 cents per share, during the same period a year ago.
Not including the effects of favorable foreign exchange rates and a $66 million gain on the tender of the company's Tele Atlas NV shares, the company would have earned 93 cents per share.
Analysts surveyed by Thomson Financial were predicting adjusted earnings of $1 per share.
Revenue rose 23 percent to $911.7 million on the strength of sales in virtually all of its market segments.
Automotive device sales were up 24 percent to $632 million, outdoor/fitness device sales were up 54 percent to $119 million and aviation device sales were up 15 percent to $90 million. Marine device sales were down 11 percent to $71 million.
"Despite the challenging macroeconomic conditions, Garmin experienced another quarter of growth in 2008 and continues to demonstrate our solid leadership position in the industry," Min Kao, the company's chairman and chief executive officer said in a news release.
Those economic pressures are going to be felt through the rest of the year, however, and the company said it expected adjusted annual earnings of $3.86 per share and $3.9 billion in revenue, below the analysts' expectations of $4 per share on $4.1 billion in revenue.
Garmin also said it would not release its Nuvifone, a cell phone that includes many of the features of its Nuvi line of GPS devices, as expected in the fourth quarter. The company blamed the delay until the first half of 2009 on difficulty in meeting the specific requirements of individual cellular carriers.
The Nuvifone is viewed as Garmin's attempt to head off losses to wireless devices that increasingly include navigational components. The company also is fighting a trademark infringement lawsuit against the Nuvifone brought by Internet telephone provider Nuvio Corp., which says the name is too close to its own.
Garmin said independent research showed it has continued to improve its market share in North America for GPS automotive devices with 55 percent of the market, up from 43 percent in the first quarter. The company also has a 20 percent market share in Europe.
Shares were down $6.64, or 14.8 percent, to $38.42 in late morning trading after dropping earlier to a 52-week low of $37.69.
The Cayman Islands-based company, with headquarters in Olathe, Kan., said it earned $256.1 million, or $1.19 per share, during the quarter, compared with $742.5 million, or 98 cents per share, during the same period a year ago.
Not including the effects of favorable foreign exchange rates and a $66 million gain on the tender of the company's Tele Atlas NV shares, the company would have earned 93 cents per share.
Analysts surveyed by Thomson Financial were predicting adjusted earnings of $1 per share.
Revenue rose 23 percent to $911.7 million on the strength of sales in virtually all of its market segments.
Automotive device sales were up 24 percent to $632 million, outdoor/fitness device sales were up 54 percent to $119 million and aviation device sales were up 15 percent to $90 million. Marine device sales were down 11 percent to $71 million.
"Despite the challenging macroeconomic conditions, Garmin experienced another quarter of growth in 2008 and continues to demonstrate our solid leadership position in the industry," Min Kao, the company's chairman and chief executive officer said in a news release.
Those economic pressures are going to be felt through the rest of the year, however, and the company said it expected adjusted annual earnings of $3.86 per share and $3.9 billion in revenue, below the analysts' expectations of $4 per share on $4.1 billion in revenue.
Garmin also said it would not release its Nuvifone, a cell phone that includes many of the features of its Nuvi line of GPS devices, as expected in the fourth quarter. The company blamed the delay until the first half of 2009 on difficulty in meeting the specific requirements of individual cellular carriers.
The Nuvifone is viewed as Garmin's attempt to head off losses to wireless devices that increasingly include navigational components. The company also is fighting a trademark infringement lawsuit against the Nuvifone brought by Internet telephone provider Nuvio Corp., which says the name is too close to its own.
Garmin said independent research showed it has continued to improve its market share in North America for GPS automotive devices with 55 percent of the market, up from 43 percent in the first quarter. The company also has a 20 percent market share in Europe.
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