SAN FRANCISCO -- One of the market-watching caveats you'll hear thrown around these days is that stocks are putting in a bottom once they stop falling on bad news.

If that's the case,

Garmin

(GRMN) - Get Report

has struck a blow for the optimists.

Shares of the personal-device maker were up more than 14% on Monday to $17.34 after the company said its fourth-quarter profit fell in half as sales dropped 14% from a year ago.

The results capped a tough year for Garmin, which saw its net income drop 14% in 2008 as demand for the company's devices slowed throughout the year, echoing the general sluggishness in consumer electronics.

That once-burgeoning demand pushed Garmin into the role of one of the hottest tech stocks of the second half of 2007, with the shares topping out at more than $112 that December.

Since then, the stock has fallen 85%.

On Monday, the company said net income for the quarter ended Dec. 27, 2008, was $157.7 million, or 78 cents a share, down from $307.3 million, or $1.39 a year earlier.

Excluding the effects of foreign-currency exchange, Garmin earned 98 cents a share, missing Wall Street consensus estimates by 5 cents.

The company's fourth-quarter sales of $1.05 billion missed analysts' estimate of $1.12 billion.

Sales in the company's automotive/mobile unit dropped 17% to $828 million.

Garmin followed the lead of a large share of tech companies this earnings season, noting that 2009 is going to be difficult but bypassing what that will mean specifically to their results:

"We recognize that 2009 is going to be a difficult year and we are prepared to manage our business accordingly. While economic conditions are very challenging and are affecting most of our markets, we continue to see opportunities to invest selectively and grow our business through new product development and market share gains," the company said in a press release, noting that it is "evaluating adjustments" to "increase cost efficiency and match operations to market demand over the near to intermediate term."

These sort of generalities aren't out of line, however, as Garmin joins the plethora of firms that have seen a steep fall in demand: Consider that the company's year-over-year sales have moved from 19% growth in the third quarter to the current decline of 14%. They could possibly be excused for essentially saying, "You know what, we really have no idea."

Despite the grimness of the results, traders also could be reacting to a couple of nuggets of relatively good news. As analysts at AmTech pointed out on Monday, Garmin's personal navigation device margins came in better than expected due likely to the company's cost-cutting offsetting pricing pressures.

In addition, Garmin shed nearly twice the $150 million in inventory it had targeted, suggesting the company's first-quarter sell-out/sell-in dynamic could improve from here. AmTech, however, warned that the brutal macro-economic environment is likely to hit investors' perceptions of demand and pricing pressures.

Garmin shares have now fallen to less than 6 times their expected 2009 earnings, and the company did still throw off nearly a quarter-billion in free cash flow in 2008. You could forgive battered investors for taking a wait-and-see approach with this name, but on Monday, at least, it was a return to glory days.