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

Garmin Ltd.GRMN is scheduled to report third-quarter 2018 results on Oct 31.

The company topped the Zacks Consensus Estimate in all the trailing four quarters, recording an average beat of 13.55%.

In the last reported quarter, Garmin delivered a positive earnings surprise of 13.79%. Earnings of 99 cents per share were up 46% sequentially and 13% year over year.

Revenues of $894.5 million surpassed the Zacks Consensus Estimate of $852.2 million, increasing 25.8% sequentially and 7.6% from the prior-year quarter.

Increasing demand across the company's fitness, outdoor, marine and aviation segments drove the top-line growth in the second quarter.

For third-quarter 2018, the Zacks Consensus Estimate for Garmin's revenues is pegged at $776.3 million. Further, the Zacks Consensus Estimate for earnings is projected at 75 cents per share.

Coming to the price performance, shares of Garmin have gained 4.8% on a year-to-date basis, outperforming the industry 's decline of 10.7%

Let's see how things are shaping up for this quarter.

Portfolio Strength - Key Catalyst

Product portfolio expansion remains the top priority for Garmin. Moreover, the company has been following a strategy of product introductions, acquisitions and strategic partnerships.

In sync with this strategy, the company is focusing on building a community of users. This will ensure increased engagement with its products which will continue to drive its top-line growth and aid market share.

The company operates in five organized segments - Outdoor, Fitness, Marine, Auto/Mobile and Aviation. A solid portfolio is expected to aid the company's performance across all the segments in the third quarter.

Garmin unveiled new outdoor GPS handheld series, the GPSMAP 66s and the GPSMAP 66st during the third quarter. This will help the users in outdoor navigation, trip planning, mapping and data sharing. This move has expanded the company's Outdoor portfolio.

The Outdoor segment remains a significant growth driver. Currently, Garmin is witnessing notable success in this segment on the back of new technologies and increasing demand for wearables worldwide.

Further, the company acquired Flight Plan (FltPlan), a provider of leading electronic flight planning, scheduling, and trip support services during the to-be-reported quarter. This has strengthened the company's Aviation business.

Apart from this, Garmin's expanding portfolio of wearables and strength in cycling are major positives for its fitness segment.

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.

Garmin Ltd. Price and EPS Surprise

Garmin Ltd. Price and EPS Surprise | Garmin Ltd. Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates along with 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 sports a Zacks Rank #1 but an Earnings ESP of 0.00%, which makes the surprise prediction difficult.

Other Stocks That Warrant a Look

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

NetScout Systems, Inc. NTCT has an Earnings ESP of +7.14 % and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Generac Holdings Inc. GNRC has an Earnings ESP of +3.19% and a Zacks Rank #1.

Silicon Motion Technology Corporation SIMO has an Earnings ESP of +0.15% and a Zacks Rank #1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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