GPS manufacturer Garmin (Nasdaq: GRMN) reported higher revenue and profit for the fourth quarter 2011, saying its outdoor and fitness segments will continue to grow in 2012 to account for nearly 30 percent of the company’s revenue.
Garmin’s fourth-quarter revenue rose 9 percent to $910 million, with its outdoor revenue jumping 35 percent to $121 million and its fitness revenue increasing 17 percent to $95 million. The company’s quarterly net income jumped 25 percent to $165.5 million, or 85 cents per share, versus $132.9 million, or 68 cents per share, from the same period a year ago.
For the full year 2011, Garmin reported its fitness revenue up 24 percent to $298 million for the year — its fastest growing segment — while its outdoor revenue grew 14 percent to $363 million.
Looking ahead to 2012, Garmin officials predicted another 20 to 25 percent increase in fitness revenues to a range of $360 million to $372 million, along with 5 to 10 percent revenue growth for outdoor to a range of $381 million to $400 million for the full year.
If Garmin sees the high end of those predictions by the end of next year, the fitness and outdoor segments combined would account for about 28 percent of its estimated $2.7 billion to $2.8 billion total revenue for 2012, up from being 12 percent of its business in 2008.
“Looking beyond 2012, we believe the fitness segment will continue to grow as society becomes increasingly aware of the important roles that fitness plays in the pursuit of a healthy lifestyle,” Garmin President Cliff Pemble said during the company’s conference call. “We will focus on delivering compelling and useful products to the market with a complete solution, including devices, wireless connectivity, measurement sensors and a well developed web portal.”
Both Garmin and GPS competitor Magellan are targeting the fitness market, along with their established presence outdoors, to make up for continuing declines in the personal navigation device market due to the rise of the technology in smartphones.