Garmin Ltd. (GRMN) surpassed market expectations on revenue and pro forma EPS numbers for the second quarter of 2018 and raised its outlook for the full year.
The company reported revenues of $894 million for Q2 2018, up 8% compared to the same period last year. Net income was $190.3 million or $1.00 per share compared to $176.9 million or $0.94 per share in the prior-year quarter. Pro forma EPS grew 9% to $0.99.
The fitness, marine, aviation and outdoor segments collectively grew 17% versus the prior-year period and contributed 80% of the total revenue. Revenues in the auto segment declined 19% mainly due to the PND market contraction.
The fitness and marine segments posted double-digit revenue growth helped by strength in advanced wearables and cycling, organic growth across multiple product categories and the Navionics acquisition. Garmin sees opportunities for advanced wearables within fitness and the company is focusing on innovations and gaining market share within the inland fishing category.
During the quarter, Garmin launched the new Panoptix LiveScopeTM, delivering the first and only live scanning sonar for recreational fishing. The company also unveiled the vívoactive 3 music, expanding its music offerings into the advanced wellness category.
Garmin is raising its full-year 2018 guidance based on its performance during the first six months. The company now expects revenues to total approx. $3.3 billion compared to the prior guidance of $3.2 billion. The change in revenue outlook is fueled by higher expectations for the fitness and aviation segments.
Pro forma EPS for 2018 is expected to be approx. $3.30. Gross margin is expected to be 58.5% and operating margin is expected to be 21.5%.