Garmin’s second quarter earnings rose seven percent to reach $955 million, a record breaking figure for the quarter.
Surpassing expectations, the navigation and cycle computer giant saw double-digit growth (12%) across its fitness, Marine and Aviation segments.
Gross margin rose from 58.5 percent to 60.3 percent, like-for-like, while operating income increased 18 percent over the prior-year quarter to reach $256 million.
The recently launched Forerunner smart watches were singled out for high praise in the results, as was the February acquisition of Dutch indoor trainer label Tacx.
At the time of the acquisition CEO Cliff Pemble said: “Tacx brings an entirely new product category to Garmin’s fitness portfolio that expands our reach into the indoor training market. Together with Tacx, Garmin will offer a seamless, enjoyable and motivating indoor and outdoor experience for cyclists all year long.”
Garmin has now begun shipping Tacx goods and expects the label’s full year profits to represent “about half of the year-over-year growth in the fitness business.”
“We achieved record second quarter revenue and profits with three of our five segments delivering strong double-digit revenue growth rates,” said Pemble, of yesterday’s results. “We are very pleased with the results we have delivered thus far, giving us the confidence to raise our full year 2019 revenue and EPS guidance.”
Future guidance has now been revised upwards for 2019.
The Q2 statement offers: “We now anticipate revenue of approximately $3.6 billion driven by higher expectations for our aviation, marine and auto segments. Our outlook for the fitness and outdoor segments is unchanged. We anticipate our full year pro forma EPS will be approximately $3.90 based on a gross margin of about 59.5%, operating margin of about 23.2% and an unchanged full year pro forma effective tax rate of about 16.5%.”