Garmin raises annual forecast on strong demand for advanced wearables

A Garmin International employee shows the Spotify app on his smartphone during a presentation in New York on Oct. 3, 2018. (Richard Drew / AP Photo)

Garmin raised its full-year revenue and adjusted profit forecasts on Wednesday, betting on strong demand for its advanced fitness wearables and growth in its marine businesses.

Shares of the company jumped 7.2 per cent in premarket trading.

• Garmin, which develops GPS-enabled products, has strengthened its position in advanced fitness wearables despite competition from Apple and Samsung.
• The company posted second-quarter revenue of US$2.02 billion. Analysts on average expected US$1.90 billion, according to data compiled by LSEG.
• In April, it forecast its fitness business to be the biggest contributor to growth this year, driven by demand for advanced wearables.
• Revenue in the segment leaped 25 per cent, while Marine segment sales increased 14 per cent.
• Consolidated gross margin expanded 360 basis points to 62.4 per cent in the quarter, driven by a favorable product mix and about US$21 million in refunds of previously paid tariffs.
• Adjusted diluted earnings per share came in at US$2.81 for the second quarter, beating estimates of US$2.24.
• The company now expects full-year adjusted profit of US$10 per share and revenue of about US$8.05 billion, up from its prior forecast of US$9.35 per share and US$7.9 billion, respectively.

(Reporting by Anzar Mehraj in Bengaluru; Editing by Joyjeet Das)