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Garmin (GRMN) to Report Q3 Earnings: What's in the Offing?

Zacks Equity Research

Garmin Ltd. GRMN is scheduled to report third-quarter 2019 results on Oct 30. In the last reported quarter, it delivered a positive earnings surprise of 16%.

The company topped the Zacks Consensus Estimate in all the trailing four quarters, recording an average of 20.32%.

Performance in the Last Reported Quarter

Garmin reported second-quarter 2019 non-GAAP earnings of $1.16 per share, which surpassed the Zacks Consensus Estimate by 16 cents and increased 17.2% from the year-ago period.

Net sales came in $954.84 million, up 7% from the year-ago quarter and 24.6% sequentially. Further, the figure outpaced the Zacks Consensus Estimate of $919.07 million.

Let’s see how things have shaped up for this announcement.

Garmin Ltd. Price and EPS Surprise

 

Garmin Ltd. Price and EPS Surprise

Garmin Ltd. price-eps-surprise | Garmin Ltd. Quote

Portfolio Strength - Key Catalyst

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

Notably, the company operates in five organized segments — Outdoor, Fitness, Marine, Auto/Mobile and Aviation. In particular, the fitness segment could have been a significant growth driver for the quarter to be reported. During the quarter, it introduced an indoor cycling trainer called NEO 2T Smart from Tacx in a bid to strengthen its fitness product offerings.

The continuous introduction of new products in all segments and a solid portfolio are expected to have aided its segmental performance in the third quarter. Also, the company’s expanding portfolio of wearables and focus on the healthcare market are likely to have been major positives for the fitness segment.

All these factors are expected to have driven top-line growth in the soon-to-be-reported quarter.

However, weak personal navigation device market might have remained a headwind for Garmin’s Auto/Mobile segment.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Garmin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Garmin has a Zacks Rank #3.

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.

Advanced Energy Industries, Inc. AEIS has an Earnings ESP of +4.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Micro Devices, Inc. AMD has an Earnings ESP of +6.54% and a Zacks Rank of #2.

Apple Inc. AAPL has an Earnings ESP of +0.04% and a Zacks Rank #3.

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