Garmin has released the results from the second quarter of 2011, announcing earnings were down 8% due to lower PND sales despite their other divisions showing growth.
Like TomTom, Garmin is facing a shrinking market in autonomous GPS systems market, but they are having trouble finding effective growth elsewhere. In the second quarter of 2011, the company announced revenue of 674 million dollars, down 8% compared to the same period last year, with their PDN division (Personal Navigation Devices) bleeding with earnings down 9% to 363 million dollars.
The problem is that this division represents the company’s main activity, and they haven’t been able to make up for it through other activities despite stable or improving figures in these divisions compared to a year ago. The four divisions (Outdoor, marine, aviation, fitness) are each worth less than 80 million dollars, making them too small to halt the erosion of the group’s earnings.
Lower earnings estimates for the financial year Garmin’s activity was well down in the United States (revenue down -21%), but did post a slight gain in Europe (+12%) and strong growth in Asia (+31%, although only representing a small percentage of the company’s earnings).
Garmin has announced that they shipped 3.8 million autonomous GPS systems this quarter, down 6% compared to a year ago. The profit margins for all of the company’s activities was down slightly to 47%, compared to 54% in the second quarter of 2010, while operation margins fell to 20%, down from 28% a year ago.
As previously seen, Garmin has lowered their forecasts for this financial year, believing that their current strategy will only start to show significant earnings from the second half of 2012. During this period, the company finalised the purchase of Navigon, a navigation software developer who provides interesting options to automobile manufacturers installing on-board navigation systems.