Updated from 11:24 a.m. EDT
Reuters had reported that Garmin CFO Kevin Rauckman said first-quarter revenue for the navigational-device maker is expected to drop between 40% and 50% from the fiscal fourth quarter.
Shares of Garmin, having fallen as much as 11% on the report, pared those losses after a company spokeswoman said the report may have misconstrued the CFO's remarks. Garmin was lately down 2.6% to $54.94 on heavy volume."We said during our last earnings call that the overall business revenue would be down closer to 40%," says Garmin senior media relations specialist Jessica Myers. "It is important to note that our guidance has not changed since the fourth quarter earnings call." During the Feb. 20 conference call, Rauckman said that the fourth quarter had been strong, and that the company would experience a slowdown going into the first quarter. "Sequentially, our business came down in total, about 20%," he said during the fourth-quarter earnings call. "I think it could be much closer to 40% in the first quarter, as we look at seasonality this year." In the fourth quarter, Garmin said revenue doubled to $1.22 billion from the year-earlier quarter thanks to strong holiday demand for the company's navigation devices. Based on Rauckman's view that the sales would fall 40%, Garmin could be expected to post first-quarter revenue of $732 million. The Thomson First Call average estimate for first-quarter revenue currently stands at $731.5 million. On the same call, he predicted a sequential decline in personal navigation devices revenue of as much as 50% quarter over quarter. Oppenheimer analyst Yair Reiner said in a research note that he believed Garmin "was patently misquoted." Reiner says the downtick in total revenue has been consistent with the company's prior guidance, and that he is confident with his current first-quarter targets. "We believe the Reuters article misunderstood Garmin's comments with respect to gross margins," said Reiner. "Garmin expects