Garmin Q4 Earnings Beat: Will a Strong Guidance Lift the Stock?

Garmin Ltd. GRMN reported fourth-quarter 2024 pro forma earnings of $2.41 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line improved 40.1% on a year-over-year basis.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Net sales were $1.82 billion, which surpassed the Zacks Consensus Estimate of $1.68 billion with a surprise of 8.3%. The figure increased 22.9% from the year-ago quarter.GRMN’s year-over-year growth in the top line was attributed to the solid momentum across Outdoor, Fitness, Aviation, Marine and Auto OEM segments.Buoyed by strong top-line and bottom-line performances, Garmin initiated a strong earnings guidance range for 2025. The better-than-expected fourth-quarter results, along with upbeat guidance, can give a fresh boost to Garmin’s share price. Shares of GRMN have soared 97.1%, outperforming the Zacks Electronics - Miscellaneous Products industry’s decline of 29.5% in the past year.Garmin Ltd. Price, Consensus and EPS Surprise Garmin Ltd. price-consensus-eps-surprise-chart | Garmin Ltd. QuoteGarmin’s Segmental DetailsOutdoor (34.5% of Net Sales): The segment generated sales of $629.4 million in the reported quarter, up 29% year over year, driven by growth in Garmin’s adventure watches primarily in its Fenix 8 series.Fitness (29.6%): The segment generated sales of $539.3 million, which increased 31% from the year-ago quarter, owing to solid demand for the company’s wearables.Aviation (13%): The segment generated sales of $236.87 million, up 9% on a year-over-year basis. This was driven by the solid momentum in both OEM and aftermarket product categories.Marine (13.8%): Garmin generated sales of $251.23 million from the segment, up 5% on a year-over-year basis. This was driven by benefits from the JL Audio buyout.Auto OEM (9.1%): The segment generated sales of $165.7 million, up 30% from the prior-year quarter. This was primarily attributed to growing shipments of domain controllers.Garmin’s Operating ResultsIn the fourth quarter, the gross margin was 59.3%, which expanded 100 basis points (bps) from the year-ago period.Garmin’s operating expenses of $564 million grew 8% from the prior-year quarter due to rising personnel costs in research and development and sales and marketing.The operating margin was 28.3% in the reported quarter, which expanded 530 bps year over year.Garmin’s Balance Sheet & Cash FlowAs of Dec. 28, 2024, cash, cash equivalents and marketable securities were $2.5 billion, up from $2.42 billion as of Sept. 28, 2024.In the fourth quarter of 2024, Garmin generated an operating cash flow of $483.89 million and a free cash flow of $399.1 million compared with the operating cash flow of $465.9 million and a free cash flow of $417.3 million reported in the prior quarter.The company paid out a quarterly dividend of $144 million and repurchased $33 million of shares in the reported quarter.Garmin Offers Strong 2025 GuidanceGarmin initiated its 2025 revenue guidance of approximately $6.80 billion. The Zacks Consensus Estimate for 2024 net sales is pegged at $6.55 billion.The company has also announced the pro-forma earnings per share guidance of $7.80. The consensus mark for 2024 earnings is pegged at $7.76 per share.It expects gross margin, operating margin and tax rate to be 58.7%, 25% and 16.5, respectively.Zacks Rank and Other Stocks to ConsiderCurrently, GRMN carries a Zacks Rank #2 (Buy).Celestica CLS, Arista Networks ANET and Pitney Bowes PBI are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. CLS, ANET and PBI sports a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus mark for CLS’ 2025 earnings has been revised upward by 31 cents to $5.67 per share over the past 30 days, indicating a 6.78% year-over-year increase. CLS shares have risen 251.2% in the past year.The consensus mark for ANET’s 2025 earnings has been revised upward by a penny to $2.42 per share over the past 60 days, indicating a 6.6% year-over-year increase. ANET shares have gained 60.2% in the past year.The consensus mark for PBI’s 2025 earnings has been revised downward by 9 cents to $1.21 per share over the past seven days, indicating a 47.6% year-over-year decline. PBI shares have gained 172.8% in the past year.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Garmin Ltd. (GRMN): Free Stock Analysis Report Pitney Bowes Inc. (PBI): Free Stock Analysis Report Celestica, Inc. (CLS): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks