Dividend.com: Garmin Way Off Course

Garmin Profit Plunges 67%, Missing View

GPS navigation maker Garmin (GRMN Quote) said Wednesday that its first-quarter profit fell 67% from the same period last year, citing a consumer spending slowdown amid the global economic recession.

The Cayman Islands-based company reported first-quarter net income of $48.5 million, or 24 cents per share, compared with $147.8 million, or 67 cents per share, in the year-ago period. Excluding currency effects, the company posted adjusted profit of 25 cents per share, while sales tumbled 34% to $437 million from $664 million.

These results badly missed expectations. On average, Wall Street analysts expected net income of 42 cents per share on sales of $531.6 million.

Garmin CEO Min Kao blamed lower consumer spending, as well as lower inventories by retailers, for the earnings miss. Kao said that a new product offered along with cost-cutting measures should help to improve the company's results for the upcoming second quarter....