Updated from 11:24 a.m. EDT
rebounded from their session lows Thursday after the company clarified earlier remarks from its chief financial officer regarding its first-quarter targets.
had reported that Garmin CFO Kevin Rauckman said first-quarter revenue for the navigational-device maker is expected to drop between 40% and 50% from the fiscal fourth quarter.
Shares of Garmin, having fallen as much as 11% on the report, pared those losses after a company spokeswoman said the report may have misconstrued the CFO's remarks. Garmin was lately down 2.6% to $54.94 on heavy volume.
"We said during our last earnings call that the overall business revenue would be down closer to 40%," says Garmin senior media relations specialist Jessica Myers. "It is important to note that our guidance has not changed since the fourth quarter earnings call."
During the Feb. 20 conference call, Rauckman said that the fourth quarter had been strong, and that the company would experience a slowdown going into the first quarter.
"Sequentially, our business came down in total, about 20%," he said during the fourth-quarter earnings call. "I think it could be much closer to 40% in the first quarter, as we look at seasonality this year."
In the fourth quarter, Garmin said revenue doubled to $1.22 billion from the year-earlier quarter thanks to strong holiday demand for the company's navigation devices. Based on Rauckman's view that the sales would fall 40%, Garmin could be expected to post first-quarter revenue of $732 million. The Thomson First Call average estimate for first-quarter revenue currently stands at $731.5 million.
On the same call, he predicted a sequential decline in personal navigation devices revenue of as much as 50% quarter over quarter.
Oppenheimer analyst Yair Reiner said in a research note that he believed Garmin "was patently misquoted." Reiner says the downtick in total revenue has been consistent with the company's prior guidance, and that he is confident with his current first-quarter targets.
"We believe the
article misunderstood Garmin's comments with respect to gross margins," said Reiner. "Garmin expects
personal navigation device gross margin to fall below 40% this year, as previously guided. In its prior call Garmin indicated that total revenue would be off about 40% sequentially, with PND revenue off about 50%."
A large portion of Garmin's future plans is based on their nuvifone, a combination touch-screen, worldphone, smartphone and GPS device in one neat package. But the company has been very careful about releasing much information about the product.
interview, Rauckman the phone should help bolster earnings starting in the third quarter and be "a profitable product" from the outset.
Combined with a warning from
MEMC Electronic Materials
, a maker of chip wafers, the outlooks were helping to drag down the broader tech sector and were overshadowing upbeat numbers
reported after the last close
Research in Motion
MEMC was down 8% to $70.29, though RIM was advancing 6% to $122.72.
, which is buying digital-map maker
, eased 0.4%.
Among other widely held tech and gadget stocks,
was losing 2%, while
was up 1.3%.