Garmin Reports Surge In 3Q Profit

DAVID TWIDDY

KANSAS CITY, Mo. (AP) — Navigational device maker Garmin Ltd. reported a 24 percent increase in third-quarter profit as lower costs offset a drop in sales.

The results beat Wall Street estimates but did little to calm investors' concerns that consumers are more likely to turn to cell phones equipped with increasingly sophisticated navigational features of their own.

Holiday forecasts of weaker demand and lower retail prices than in past years didn't help matters.

Shares plunged 14.8 percent, falling $4.65 to $26.76 in afternoon trading Wednesday.

Oppenheimer Equity Research analyst Yair Reiner said in a research note that he was impressed by how much better the company did than analysts like him expected, but he doubted it registered with shareholders.

"As impressive as it is, will likely do little to ease investor concerns about the sustainability of the PND business in a world of free Google mobile navigation," Reiner said. "Against that backdrop, some holders may use any strength this morning as a pathway to a clean exit."