Garmin (GRMN 0.63%) reported its first-quarter earnings today and investors saw a lot to like. The maker of wearables, activity trackers, and other high-tech outdoor adventure devices saw sales soar 20% compared to last year's first quarter.
Investors jumped into the stock in response. Garmin stock had already moved higher by nearly 50% over the last year, and it jumped by another 11.7% today, as of 11:15 a.m. ET.
NYSE: GRMN
Key Data Points
Garmin stock keeps running
Garmin's devices use global positioning system (GPS) technology to give outdoor recreation enthusiasts information and data that improves their overall experience. Each of its five operating segments showed strong revenue growth that exceeded expectations in the first quarter. Year over year revenue increased as follows:
- Fitness: 40%
- Outdoor: 11%
- Aviation: 2%
- Marine: 17%
- Auto (original equipment manufacturer): 58%
The overall 20% sales growth is one of the items that has investors excited. Garmin had previously said it expects 10% sales growth for 2024 over 2023. Its first quarter is historically the slowest season, so that result implies the company could be in position to exceed its prior estimates.
Garmin doesn't typically adjust its outlook after first-quarter results, and it held to that practice in this report. But investors are very likely thinking that management will boost its 2024 outlook in the coming months and want to own shares prior to that potential news.
Garmin president and CEO Cliff Pemble attributed the strong growth to "our strong product portfolio and the robust demand trends that we have been experiencing." The results also handily beat average analyst estimates. Earnings per share were $1.42 compared to the $1.01 expected by analysts. Revenue also beat expectations.
Garmin pays a dividend that now yields less than 2% after the stock jump today. But it has a history of increasing that payout, and it is likely to do that again this year. Garmin holds about $3.3 billion in cash and marketable securities on its balance sheet. The stock should appeal to many investors, as it offers both growth and income in the future.
