UPDATE 1-Aviation, fitness sales drive Garmin profit

Reuters

(Corrects paragraph 11 to say the company's revenue beat, not missed, analysts' average estimate)

Feb 19 (Reuters) - Navigation device maker Garmin Ltd reported a better-than-expected quarterly profit, helped by strong demand for aviation and fitness products, sending its shares up 8 percent before the bell.

The company, which also forecast 2014 revenue above the average analyst estimate, has been looking to offset falling sales of its GPS devices that once dominated personal navigation.

Sales from the personal navigation devices unit fell 12 percent to $382.5 million in the fourth quarter, while sales from all other units combined rose 14 percent to account for nearly half of the company's total sales.

Aviation unit sales jumped 25 percent to $87.4 million in the quarter. The unit sells products such as audio panels and collision avoidance systems to aircraft makers such as Textron Inc's Cessna and Bombardier Inc's LearJet.

Sales at its fitness business, which makes products such as GPS-enabled "Forerunner"-branded watches to count calories and monitor heart beats, rose 14 percent to $118.6 million.

Dutch rival TomTom - Europe's largest maker of navigation devices - said last week it expects the personal navigation device market to continue to decline this year due to a slump in demand for personal sat-navs and a tepid recovery in the auto industry.

The company said it expects a profit of $2.50-$2.60 per share on revenue of $2.6-$2.7 billion for 2014. Analysts on average were expecting a profit of $2.56 per share on revenue of $2.58 billion, according to Thomson Reuters I/B/E/S.

Garmin said it expects gross margins to improve to 54-55 percent as it sells more higher-margin products.

Net income rose to $163.6 million, or 83 cents per share, in the fourth quarter, from $129.3 million, or 66 cents per share, a year earlier.

Excluding items, earnings were 76 cents per share, beating the average analyst estimate of 62 cents.

Total sales fell 1 percent to $759.7 million, beating analysts' average estimate of $712.8 million.

Garmin also said Chief Financial Officer Kevin Rauckman would leave the company within the next year.

Shares of the Schaffhausen, Switzerland-based company were up 7.7 percent at $50.85 in premarket trading on Wednesday. The stock has gained about 21 percent in the past year.

As of Tuesday's close, Garmin shares traded at a multiple of 18.6 times forward earnings, compared with TomTom's 20.6.

(Reporting by Soham Chatterjee; Editing by Saumyadeb Chakrabarty)

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