Garmin Posts Steep Decline In 1Q Earnings

DAVID TWIDDY

KANSAS CITY, Mo. (AP) — Navigational device maker Garmin Ltd. on Wednesday said first-quarter profits fell 67 percent, missing Wall Street expectations as the company dealt with slower consumer spending.

Company officials also said during a conference call that Garmin's long-delayed entrance into the cellular market was being pushed back again, with the company now expecting to begin selling its Garmin-Asus nuvifone in the second half of this year instead of the first half.

Shares fell almost 15 percent in trading Wednesday, dropping $3.83 to $21.83.

CEO Min Kao said the overall economy malaise was exacerbated by retailers cutting their inventories. He said the year's first three months "represented Garmin's most challenging quarter since becoming a public company" almost a decade ago.

He said the company would focus on new products and further cost cutting to improve profitability in the second quarter.

The Cayman Islands-based company, with its headquarters in Olathe, Kan., reported earning $48.5 million, or 24 cents per share. By comparison, Garmin earned $147.8 million, or 67 cents per share, during the same period a year ago.