Garmin profit drives off a cliff as motorists ditch satnav tools

City A.M. Reporter
GARMIN yesterday forecast full-year results below analysts’ estimates, suggesting a market share gain from smaller rivals could no longer offset a lack of demand for its GPS-enabled handheld navigation devices.

Net profit fell to $129.3m (£84.5m) in the fourth quarter, from $165.6m a year earlier.

Shares of Garmin, whose quarterly profit also fell short of market estimates, fell over nine per cent after the results.

America’s biggest navigation device maker has been trying to fight sluggish demand for these once must-have gadgets by bundling them with high-margin specialised mapping services, as smartphones loaded with free mapping apps invade its market.

Analysts had expected the strategy of including valuable mapping software with hardware to boost sales by the end of 2012.

But total annual revenue fell 16 per cent to $910m, the firm said yesterday.

Sales at Garmin’s struggling automotive and mobile business, which makes navigation devices for cars and accounted for nearly half of the company’s total revenue in the fourth quarter, slipped to $437m.

The company’s outdoor business, which makes dog-trackers and golf gadgets, fell two per cent to $119m in the fourth quarter, while revenue from its fitness business that makes gadgets such as GPS-enabled watches to count calories and monitor heart beats, rose 10 per cent to $104m.