Benzinga | Jul 28, 2021 09:32AM EDT

Garmin Beats On Q2 Earnings, Notes Strong Demand Aided By Sector Recovery, Raises FY21 Guidance

* Garmin Ltd (NASDAQ:GRMN) reported second-quarter FY21 revenue growth of 53% year-on-year to $1.33 billion, beating the analyst consensus of $1.11 billion.

* Continued strong demand for active lifestyle products, solid recovery within aviation and auto segments drove the numbers.

* Revenue from Fitness rose 40% Y/Y to $413.2 million, Outdoor increased 57% Y/Y to $323.4 million, Aviation improved 43% Y/Y to $180.8 million, Marine jumped 66% Y/Y to $261.8 million, and Auto sales grew 74% Y/Y to $147.7 million.

* The gross margin contracted 50 basis points to 58.8%, while the operating margin expanded 630 basis points to 28%.

* EPS of $1.68 beat the analyst consensus of $1.26.

* Garmin generated $229.7 million in operating cash flow, $120 million in free cash flow and held $3.20 billion in cash, equivalents, and marketable securities at the end of Q2.

* The company paid dividends worth $117 million.

* Outlook: Garmin raised the FY21 revenue guidance to $4.6 billion to $4.9 billion, above the analyst consensus of $4.71 billion.

* It also increased the non-GAAP EPS guidance to $5.15 to $5.50 versus the analyst consensus of $5.43.

* It expects a gross margin of 58.5% and an operating margin of 23.8%

* Price action: GRMN shares traded higher by 0.63% at $153 in the premarket session on the last check Wednesday.

* Photo by rottonara from Pixabay