GPS companies see demand soften in 1st quarter

Trimble and Garmin say demand softer in some specialty markets during 1st quarter; shares fall

Associated Press

Global positioning system companies Garmin and Trimble say demand in some of their specialty markets suffered during the first quarter.

The companies had both anticipated that the first three months of the year would be a difficult period, due largely to still uncertain economic conditions.

Garmin Ltd. reported Wednesday that its net income increased to $88.7 million, or 45 cents per share, for the period that ended March 30. That compared with $86.9 million, or 44 cents per share, in the 2012 quarter.

Excluding special items, the Swiss company earned 40 cents per share in the 2013 period, versus 45 cents per share last year.

Its revenue fell 4 percent to $532 million, with declines in all regions around the globe.

Analysts, on average, were expecting the company to post adjusted earnings of 41 cents per share, on revenue of $516.3 million, according to data provider FactSet.

Garmin's biggest drop came from a 10 percent decline in its automotive and mobile segment where revenue fell to $252.6 million. Its outdoor segment revenue fell 1 percent to $76.2 million and its marine segment revenue fell 10 percent to $50.3 million. Its revenue from its fitness and aviation segments improved.

Sunnyvale, Calif.-based Trimble Navigation Ltd., which makes GPS products used in construction, agricultural and aircraft equipment, said its first-quarter net income fell 2 percent. It earned $49.8 million, or 19 cents per share, for the period. That compared with $50.8 million, or 20 cents per share, in the same quarter of last year.

After adjusting for restructuring expenses and other special items, it earned 38 cents per share versus 34 cents per share in the 2012 first quarter.

Revenue increased 11 percent to $556.1 million.

Analysts were anticipating the company would earn 38 cents per share, on revenue of $578.1 million.

Trimble said that while the company anticipated conservative spending by customers during the quarter due to the uncertain economy, it did not anticipate the negative impact of actions related to federal budget cuts and severe weather conditions in Europe and North America that delayed agricultural and construction seasons.

The company said it does not believe the fundamentals of its markets or long-term expectations are changed. While it remains cautious about its prospects in the second quarter, it expects improved organic growth in the second half of the year.

Shares of Trimble fell $2.31, or 8 percent, to close at $26.43. The stock is down more than 11 percent since the start of the year.

Garmin's shares fell 4 percent to $33.68, near the bottom of its 52-week trading range of $32.52 to $50.67. It is down about 17 percent since the beginning of 2013.

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