Garmin Ltd. (GRMN), a maker of global positioning system, or GPS-enabled products, reported Wednesday an increase in third-quarter profit, despite a 10% decline in revenues, reflecting improved gross margins as well as lower costs incurred during the period. The Camana Bay, Cayman Islands-based company's net income for the quarter increased to $215.13 million or $1.07 per share from $171.24 million or $0.82 per share in the previous year. Results for the quarter include foreign currency translation gain of $9.85 million. Excluding items, pro forma net income for the quarter rose to $205.28 million or $1.02 per share, from $181.57 million or $0.87 per share in the same quarter last year. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items.
In its second quarter, the company posted net income of $161.87 million or $0.81 per share, compared with $256.09 million or $1.19 per share in the same quarter last year. Net sales for the third quarter declined 10% to $781.25 million from $870.35 million in the same quarter last year. Seventeen analysts had a consensus revenue estimate of $703.91 million for the quarter. Garmin's second-quarter net sales were $669.10 million, down 27% from $911.67 million in the prior year second quarter.
Segment-wise, net sales from Outdoor/Fitness increased 11% to $132.17 million from $118.61 million a year ago. Marine generated net sales of $45.43 million, up 3%, from $44.05 million last year. "While we do not expect to post significant growth in this segment until the macroeconomic conditions improve, we do expect that year-over-year revenues have stabilized in the near-term," the company said. Automotive/Mobile segment net sales decreased 13% to $545.71 million from $626.51 million in the same quarter last year. Aviation net sales were $57.95 million, down 29%, compared to $81.19 million in the prior year, as the segment continues to be affected by the difficult economic environment. The company said it does not anticipate growth in the industry until overall market conditions show consistent stabilization. According to the company, North America and Europe continued to experience year-over-year revenue declines while Asia improved from last year. North America revenue was $503 million, down 14%, compared to $585 million a year ago and Europe revenue decreased 4% to $237 million from $247 million last year. Asia revenues increased 8% to $41 million from $38 million in the previous year.
Operating income was $236.88 million, up from $214.36 million in the previous year. Operating margin increased to 30.3% from 24.6% in the year-ago quarter. Gross margin improved to 52.4% from 44.3% in third quarter 2008. Cost of goods sold dropped to $371.51 million from $484.72 million in the year earlier. Total operating expenses increased to $172.86 million from $171.28 million in the comparable quarter a year ago.
Advertising expenses decreased to $45.85 million from $50.74 million in the previous year. Selling, general and administrative expenses increased to $71.5 million from $67.78 million a year ago. Research and development expenses were $55.51 million, up from $52.75 million last year. For the nine-month period, the company's net income declined to $425.54 million or $2.12 per share from $575.11 million or $2.68 per share in the preceding year. Pro Forma net income was $421.85 million or $2.1 per share, compared to net income of $529.94 million or $2.47 per share in the prior year. Net sales for the period dropped to $1.89 billion from $2.44 billion in the same period last year.
Min Kao, chairman and chief executive officer commented, "We saw steady sequential improvement in our consumer segments during the third quarter and are very pleased to return to year-over-year earnings per share growth in the quarter. While revenues fell year-over-year, the rate of decline moderated at 10% but our margin improvements more than offset that decline. We remain focused on efforts to improve productivity and manage expenses as the consumer spending environment continues to recover."
GRMN closed Tuesday's regular trading at $31.41 on the Nasdaq. In the past 52 weeks, the stock has been trading in a range of $14.4- $39.65 on the Nasdaq.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.