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Garmin reports increases in profit, revenue for first quarter

Published April 27, 2016

OLATHE, Kan. (BRAIN) — Garmin reported Wednesday that its first-quarter revenue rose 7 percent and net profit surged 32 percent as the company saw strong double-digit growth in the outdoor and marine segments that helped offset continuing declines in its automotive business. Garmin also reported high-single-digit growth in its fitness segment, which includes cycling products.

The 33 increase in outdoor revenue was highlighted by strong sales of Garmin's Fenix line of wearables as well as dog products, while the 29 percent growth in marine revenue was fueled by the company's Chartplotter fish-finding products.

Fitness revenue rose 9 percent to $142 million, Garmin's second-largest business segment after automotive, on strong demand for products with the company's Elevate wrist heart rate technology.

"Running and activity tracker categories experienced robust growth over the prior year, somewhat offset by declines in the multisport category," president and CEO Cliff Pemble said in an earnings call. Garmin provided no details about its cycling business in particular during the call.

Fitness margins declined, however, due to product mix shifting to lower-margin products like activity trackers, Pemble stated. "While the margin profile of our fitness segment has changed in recent quarters, we believe the performance will stabilize as we complete critical market and product transitions," he added.

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