Garmin Bids for Tele Atlas
Revenue for the quarter rose 79% to $729 million from $408 million in the year-ago quarter. Analysts were expecting $683.17 million in revenue. Garmin said it sold 2.69 million units in the third quarter of 2007, up 119% from the same quarter of 2006, with the average selling price at $271 a unit, 7% below the second quarter.
Nearly two-thirds of the company's third-quarter revenue in its automobile segment came from what it called "lower price products" with mid-range and higher-priced products completing the mix.
Garmin reported better-than-expected gross margin in some segments -- a key concern for analysts and investors. Gross margin in its aviation division remained stable at 66% during the quarter. The outdoor and fitness division saw its gross margin decrease 52%.
The automobile division -- probably the most closely watched segment of the company's business -- posted a 43% gross margin, beating expectations, said Garmin."The primary reason for the strength of the gross margin in the segment is price compression was not as strong as earlier expected," said Rauckman. "We also experienced benefit from favorable product mix as personal navigation devices sold in the U.S. were greater than in Europe." The company's automotive and mobile segment revenue increased 118% to $519 million in the quarter, while the aviation segment revenue increased 27% to $74 million.
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