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Garmin Reports Revenue Declines

Cayman Islands — Garmin reported a revenue slide of 34 percent for its first quarter, marking its worst quarter since becoming a public company in 2000.

Citing poor macro-economic conditions, Garmin said total revenue for the quarter, ended March 28, was $437 million, down from $664 million in first quarter 2008.

Net income was $48.5 million, down from $147.8 million for the same period a year ago, while operating income was $58 million, compared with $172.8 million a year ago.

Gross margins declined from the year-ago quarter to 44.9 percent from 48.2 percent, but gross margins were up sequentially from 41.1 percent during the fourth quarter last year.

On the plus side, Garmin said it retains a better than 50 percent market share in the U.S., and it noted that retailers have sold through much of their overstocked inventory left over from Christmas.

Dr. Min Kao, chairman and CEO, said, “As we look specifically at the auto/mobile segment, we believe that inventory levels have reached their low point and that sell-in to the channel will begin to more closely follow sell-through trends in coming quarters. This is a promising factor given that sell-through trends in the United States have continued to show growth in the first quarter. “

While aviation and marine segments also struggled during the quarter, the outdoor fitness segment posted growth of 13 percent to $80 million. Marine and aviation segments fell by 32 percent and 31 percent, respectively.

Garmin said it expects average selling prices in North America to improve going forward and that cost-cutting measures and the launch of new products will improve its second-quarter results.

Among new products on the horizon are the Garmin Asus Nuvifone G60 GPS smartphone due this half and an M20 Nuvifone due later this year.