Updated from 9:11 a.m. EDT
shares fell sharply Wednesday after it missed second-quarter estimates, warned on the full year and delayed the launch of its eagerly anticipated nuvifone device.
The Cayman Islands-based digital-navigation gadget maker posted net income of $256 million, or $1.19 a share, in the quarter. That was up from $214 million, or 98 cents a share, in the year-ago quarter.
Excluding items related to the effects of foreign currency exchange and the tender of Tele Atlas N.V. shares, Garmin had a profit of 93 cents a share. Analysts were looking for a profit of $1 a share, according to Thomson Reuters.
Garmin said that revenue for the second quarter was up 23% from a year earlier to $912 million, but came up well short of Wall Street's revenue target of $956.4 million. Revenue from North America, Garmin's largest market, surged 27% to $576 million. Revenue from Europe increased 19%, while Asia revenue slid 6.5%.
Shares of Garmin were recently dropping $7.36, or 16.3%, to $37.70. The company's stock has fallen more than 60% in 2008.
"Despite the challenging macro economic conditions, Garmin experienced another quarter of growth in 2008 and continues to demonstrate our solid leadership position in the industry," said CEO Min Kao. However, looking ahead, Kao said that "the sector is not growing as rapidly as earlier anticipated," and as a result of a more cost-conscious consumer, Garmin has lowered its full-year revenue growth expectations.
Garmin now expects a profit for the year of $3.86 a share, which excludes a gain from the tender of the Tele Atlas stock, on revenue of $3.9 billion. Additionally, the company anticipates operating margins to be approximately 25% for 2008. Wall Street is looking for Garmin to earn $4 a share with revenue of $4.12 billion.
Additionally, Garmin said it continues to expect prices for personal navigation devices to drop 25% during 2008, although the company expects to offset that decline by reducing projected raw material costs by 20%.
Another disappointment for investors came as Garmin said it would postpone the roll-out of its all-in-one nuvifone handset until the first half of next year.
"While we had hoped to have carrier launches in the fourth quarter, we have found that meeting some of the carrier-specific requirements will take longer than anticipated," the company said. "We remain pleased with carrier interest in the device and are working toward making necessary design changes to meet their requirements."
Among related companies, shares of rival
lost about 3% in overseas trading.
, which recently acquired digital mapmaker Navteq, was off nearly 1%.