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Posted
Apr 30 2008, 10:20 AM
by
Kim Peterson
Rating:
Garmin's days as a high-flying stock are over. Shares are down 11% today, hitting a two-year low after the company reported weak first-quarter profit and sales numbers. The quarter wasn't bad -- profit rose nearly 6% and sales were up 35% -- but analysts were simply expecting more. Garmin shares have dropped 66% in the last six months. Garmin put on a happy face with the earnings, noting that "the global economic slowdown has impacted companies across the board." Executives also said that the first quarter is usually the slowest in terms of sales. But CFO Kevin Rauckman acknowledged that economic conditions are bringing some risk to future growth. Garmin has said it expects $4.5 billion in revenue this year, which one analyst said now "looks like quite a reach at this stage."
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Posted
Apr 01 2008, 12:18 PM
by
Kim Peterson
Rating:
This was supposed to be a big week for Garmin. The satellite navigation leader tried to make a splash at the CTIA wireless trade show in Las Vegas yesterday by announcing big deals with MapQuest and Google. Yet investors greeted the news with a collective frown: Shares are down 10% from last week and 40% from the beginning of the year.
It didn't help that on Friday a Stanford Group analyst began covering Garmin with a "sell" rating. The analyst said something that's been weighing on investors' minds for some time: Handsets and mobile phones with GPS capabilities are a growing threat. Yes, Garmin is developing its own GPS phone, the Nuvifone, but sales may underwhelm, the analyst said. Garmin shares fell nearly 5% after the report came out.
Garmin isn't alone here. The overall navigation device market is suffering. Shares of SiRF Technology, which makes chips for navigation devices, are starting to recover after the company cut its Q1 sales forecast last week and announced layoffs. There are fears that SiRF is losing market share to Broadcom, which isn't so specialized in the GPS market. SiRF shares are down 79% from the start of the year.
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Posted
Mar 13 2008, 11:02 AM
by
Kim Peterson
Rating:
Jonathan Goldberg seems like a glass-half-empty kinda guy. The Deutsche Bank analyst has been checking in with retailers for weeks about consumer electronics sales, and many companies told him they "have yet to see an impact" in earnings from any economic slowdown. Sounds great, right? Nope, Goldberg interprets that to mean the worst is yet to come. "The increase in gas prices and difficulties in home financing will have to reduce consumer spending, and as this becomes apparent to companies we will face a round of missed quarters and lowered guidance," he wrote in a note to investors. Goldberg cut price targets today on four companies: GPS device maker Garmin, wireless chipmaker Atheros, wireless networking hardware maker Netgear and mobile content maker Glu Mobile. Shares of all four companies are down today, and Glu Mobile seeing the worst drop of nearly 9%.
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Posted
Feb 20 2008, 12:23 PM
by
Robert Walberg
Rating:
One of the most annoying, difficult-to-understand occurences on Wall Street for the average investor is when a company reports a blow-out quarter and the stock takes a dive. It goes against logic to see and hear good news about the stock you own, only to watch it take a beating from the marketplace after the release. Today's whipping boy was navigational device maker Garmin.
The stock tumbled more than 7% in active trading for the crime of beating fourth-quarter estimates by a wide margin, guiding fiscal 2008 revenue and earnings above Street projections and announcing that the board approved the repurchasing of 5 million shares. If that doesn't leave you scratching your head and wondering what on earth it takes to drive a stock higher in today's climate I don't know what will.
I mean the company sold almost as many portable navigation devices in the fourth quarter of 2007 (5.5 million) as it did in all of 2006! This is a firm with incredible sales and earnings momentum. Point in fact; the company has now beaten The Street in eight of the last nine quarters.
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Posted
Nov 26 2007, 07:08 AM
by
Kim Peterson
Is any work getting done today? It's Cyber Monday, a marketing gimmick that turned into a real trend. Retailers predict that 72 million people will shop online today, up from 61 million last year.
GPS systems are going to be a hot gift, and Garmin is seeing the investor love today. It's shares are up 8.5% to $99.63
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Posted
Nov 08 2007, 08:01 AM
by
Robert Walberg
Is Garmin lost? Based on the fact that the stock price has been heading due south for the past few weeks -- to the tune of about 28% -- it would appear that the answer to that question is yes. However, before you steer clear of the country's leading provider of in-car and handheld navigational devices you might want to dig a little deeper into the rationale behind the recent decline.
First and foremost, Garmin now finds itself in a bidding war with its European rival TomTom for Tele Atlas, which provides map data for portable navigational devices. Just yesterday, TomTom upped its original offer for Tele Atlas to about $4.3 billion, eclipsing Garmin's surprise offer by a handsome 22%. Garmin must now either cough up over $5 bln for Tele Atlas within the next few days, or see another top mapping company fall into the hands of a competitor. Nokia acquired Navteq earlier this year for more than $8 billion.
Obviously, if the company ends up paying more for its hostile run at Tele Atlas it would depress the price of the stock further as investors will question how much the purchase willl dilute future earnings growth. There's also the problem of integration should Garmin navigate its way to victory, as the company currently relies primarily on Navteq for its mapping data. The switch to Tele Atlas would not only take time, but the execution risk is very high. I think this is what is meant by the phrase "winning ugly." If Garmin decides to raise its bid and wins the battle to acquire Tele Atlas, shareholders might be in for a lot more ugly over the next year.
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Posted
Oct 03 2007, 12:19 PM
by
Matt Koppenheffer
Rating:
So it looks to me like nobody is really happy about the announcement that cellphone maker Nokia will be acquiring digital map maker Navteq. Nokia's shareholders think that the company is overpaying for Navteq, Navteq shareholders aren't too keen about the company's future upside being cut off, and Garmin shareholders... well, they're downright inconsolable that Garmin didn't get Navteq first.
Garmin shares dropped 10% on the day of the announcement and have shed another 10% since. Ouch.
Now I can commiserate with Nokia and Navteq shareholders. I think the acquisition may prove to have more headaches than synergies for Nokia, while Navteq probably had a really bright future ahead of it as a stand-alone company. But I think Garmin shareholders have probably overreacted.
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Posted
Oct 02 2007, 08:26 AM
by
Kim Peterson
Rating:
Garmin shares continue to drop today, a day after Nokia said it was buying digital mapping company Navteq for $8.1 billion. Navteq provides the location data used by global positioning systems like Garmin's.
Today, Garmin competitor TomTom is making a formal takeover offer for digital map company Tele Atlas.
Not good for Garmin, which has made a nice business of selling GPS navigation systems. Its share price dropped 10 percent to $107.23 yesterday and is down another 6 percent today. The Nokia buy was a wake-up call to investors that Garmin has a serious threat in the cell phone. Soon, GPS navigation will be a feature in phones, eliminating the need for a standalone device like Garmin's StreetPilot series.
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