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Garmin (GRMN) to Report Q1 Earnings: What's in the Offing?

Zacks Equity Research

Garmin Ltd. GRMN is scheduled to report first-quarter 2019 results on May 1.

The company topped the Zacks Consensus Estimate in all the trailing four quarters, recording average of 24.42%.

In the last reported quarter, Garmin delivered a positive earnings surprise of 29.11%. Earnings of $1.02 per share increased 2% sequentially and 29% year over year.

Increasing demand across the company’s fitness, outdoor, marine and aviation segments drove the results.

We observe that shares of Garmin have gained 45.4% in the past year compared with its industry’s 12.2% rally.

Let’s see how things are shaping up for the to-be-reported quarter.

Portfolio Strength - Key Catalyst

Product portfolio expansion remains the top priority for Garmin. The company has been following a strategy of product introduction, acquisitions and strategic partnerships in this regard, which is anticipated to benefit the to-be-reported quarter as well.

The company operates in five organized segments — Outdoor, Fitness, Marine, Auto/Mobile and Aviation. A solid portfolio is expected to have aided the company’s performance across all the segments in the first quarter.

The Outdoor segment is a significant growth driver for the quarter to be reported.

In addition, Garmin’s expanding portfolio of wearables and strength in cycling are major positives for the fitness segment.

During the first quarter, the company launched a new GPS smartwatch, Approach S40. It also unveiled a range of tool watches and the MARQ series, in a bid to expand its wearables watch portfolio.

All these factors are expected to drive the company’s top-line growth in the soon-to-be-reported quarter.

However, weak personal navigation device (PND) market remains a headwind for Garmin’s Auto/Mobile segment.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Garmin currently holds a Zacks Rank #3 and has an Earnings ESP of 0.00%, which makes surprise prediction difficult.

Stocks That Warrant a Look

Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Juniper Networks, Inc. JNPR has an Earnings ESP of +10.00% and holds a Zacks Rank #2.

Square, Inc. SQ has an Earnings ESP of +5.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Triton International Limited TRTN has an Earnings ESP of +2.51% and holds a Zacks Rank #3.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

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