Garmin's Q2 resilient, well ahead of estimates, COVID-19 fears
Garmin's second quarter earnings and revenue were well ahead of expectations and highlighted how the COVID-19 pandemic did little to dent sales of its fitness trackers and smartwatches.
The company didn't mention its ransomware attack in its earnings statement.
In any case, Garmin's earnings did the talking. The company reported second quarter revenue of $869.97 million, down 9% from a year ago. Garmin's fitness category sales were up 17%. Earnings were 96 cents a share and 91 cents a share on a non-GAAP basis.
Wall Street was expecting Garmin to report second quarter sales of $658.8 million with non-GAAP earnings of 39 cents a share.
Garmin CEO Cliff Pemble said the company had a quarter with "unprecedented challenges," but noted that "business conditions rapidly improved from April lows driven by popular fitness, marine, and outdoor products."
On Garmin's site, the company said, "we are happy to report that many of the systems and services affected by the recent outage, including Garmin Connect, are returning to operation."
- Garmin begins to restore Garmin Connect features, services, says customer data not impacted
- Garmin services and production go down after ransomware attack
- Garmin's outage, ransomware attack response lacking as earnings loom
- Garmin Fenix smartwatches hit with GPS, run and activity saving glitch amid outage
On a conference call with analysts, Pemble said sales of advanced wearables and cycling products surged after a rough start in April. "Looking forward, we expect that the interest in health and fitness will remain very strong. We are ready to see this opportunity with a great lineup of new products with more new products on the way," he said.
Pemble also said that Garmin is going to enter "new market verticals" beyond its aviation, automotive and fitness.
Regarding the cyberattack, Pemble didn't address it beyond what Garmin has already said:
Most of you are aware of the recent cyber attack that led to a network outage affecting much of our website and consumer-facing applications. We immediately assess the nature of the attack and started remediation efforts. We have no indication that any customer data was accessed, lost or stolen. Additionally, the functionality of Garmin products was not affected other than the ability to access some online services. Critical affected business systems have been restored, and we expect to restore remaining systems in the coming days. We appreciate the patience and kind words of support we've received from customers and friends during this challenge.