Why Garmin (GRMN) Hit a 5-Year High Today

NEW YORK (TheStreet) -- Garmin  (GRMN) surged to a five-year high of $52.72 on Wednesday after the navigation device maker reported better-than-expected profits in its fourth-quarter report.

Net income rose to $163.6 million, or 83 cents a share, from $129.3 million, or 66 cents a share, in the same period one year earlier. Earnings per share, excluding items, were 76 cents, which surpassed analysts' estimates of 62 cents, according to Thomson Reuters I/B/E/S.

Garmin also said it expects full-year revenue in 2014 in the range of $2.6 billion to $2.7 billion and earnings per share of $2.50 to $2.60. This beat analysts' expectations of $2.56 a share on $2.58 billion in revenue.

Sales from Garmin's personal navigation devices, which once dominated the market, fell 12% to $382.5 million for the quarter, but sales from all other areas rose 14% to account for almost half of the company's total sales in the period. Aviation unit sales, which include audio panels and collision avoidance systems to various aircraft makers, spiked 25% to $87.4 million. Fitness unit sales, which include the "Forerunner" brand watches that have GPS, can count calories and monitor heart rate, climbed 14% to $118.6 million.

Must ReadGarmin Reports EPS Growth In Fourth Quarter 2013 With Strong Margin Performance; Proposes Dividend Increase; Announces CFO Transition

TheStreet Ratings team rates GARMIN LTD as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GARMIN LTD (GRMN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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