Garmin (GRMN) reported better-than-expected first-quarter earnings on Wednesday as it continued to make strides in new niche markets such as electronic pet training and fitness trackers, offsetting slides in the auto business it once dominated.
The Swiss-based provider of global positioning systems reported net income of $118.8 million, or 61 cents a share, compared with a year-earlier profit of $88.7 million, or 45 cents.
Excluding one-time items, Garmin said it earned 55 cents, topping average analyst estimates of 44 cents in a Thomson Reuters poll.
Revenue for the three-month period ended March 29 grew 10% to $583.2 million from $532 million a year ago, beating the Street’s view of $541 million.
Gains were led by sharp increases in its outdoor, aviation, fitness and marine segments, which grew 22% over the year-earlier period and now comprise 58% of total revenues.
This comes as the company continues to lose share of the automotive GPS market as cars come already equipped with GPS systems from rivals and drivers take advantage of driver-friendly apps such as Google’s (GOOG) Waze.
"We have had a great start to 2014 with revenue, operating income and pro forma EPS growth; yet, we realize that we cannot be complacent," said Garmin CEO Cliff Pemble, adding that the company’s markets are both “dynamic and competitive.”
"We must capitalize on our strong portfolio of products in 2014 while also identifying new opportunities and innovations that will provide future growth potential,” he said.
Among its winners last quarter were its series of smart dog collars, such as the BarkLimiter and Delta Sport Training system, that allow pet owners to train their pups electronically. A part of its “outdoor” segment, the collars helped propel 10% revenue growth in the unit.
In its fitness group, sales surged 38% year-over-year, thanks in large part to its Forerunner 220 and 620 running watches and the mid-quarter launch of its fitness band, vivofit.
As expected, sales in its traditional automotive segment fell 4%, though the company says it remains “pleased” with its market share and profitability in the industry, and continues to focus on identifying niche markets like dash cams and RV units.
Garmin plans to update its full-year guidance at the end of the second quarter.
Its shares climbed more than 5.3% to $58 in recent trade.