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Garmin’s Q4 Results Exceed Expectations

Garmin (GRMN), a manufacturer of navigation and communication equipment, has reported better-than-expected results for the fourth quarter and Fiscal Year ended December 25, 2021.

Adjusted earnings came in at $1.55 per share, down 10% from $1.73 in the same quarter last year. However, the figure surpassed analysts’ estimates of $1.37 per share. Revenues rose 3% to $1.39 billion and came above analysts’ expectations of $1.36 billion.

Segment-wise, the company benefitted most from a 21% rise in revenues from Auto unit. Also, Aviation and Marine segments witnessed sales growth of 13% and 14%, respectively. This was partially offset by an 8% drop in Outdoor sales.

Garmin ended the quarter with cash and marketable securities of about $3.1 billion and generated a free cash flow of $49 million.

The President and CEO of Garmin, Cliff Pemble, said, “We are entering 2022 with a great lineup of recently introduced products and have more exciting product introductions planned throughout the year. I am very proud of what we have accomplished in 2021 and look forward to the opportunities and challenges of the new year.”

Outlook

In 2022, Garmin expects to generate revenue of about $5.5 billion, up 10% year-over-year. Adjusted EPS is projected to be nearly $5.90 per share based upon gross margin of 57.5% and operating margin of about 22.8%.

Dividend

Alongside earnings, the company announced that it plans to raise its quarterly dividend by 1.1% to $0.73 per share. The board of directors intends to recommend the matter to the shareholders for approval at the annual meeting on June 10, 2022.

Garmin’s dividend history remains impressive. GRMN has been increasing its quarterly dividend once each year in January over the last four years, with the trend continuing in 2022 as well. The company is expected to pay its quarterly common stock dividend of $0.67 on March 31, 2022.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Garmin, as 9.5% of investors on TipRanks increased their exposure to GRMN stock over the past 30 days.

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