Garmin Ltd. reported a drop in first-quarter net income and revenue Wednesday, with its navigation devices facing a competitive threat from smart phones.
The only part of Garmin's business that didn't grow during the quarter was its automotive and mobile unit, which is struggling as more consumers turn to their cell phones for driving directions. A 15 percent drop in revenue in that segment — the company's biggest — was enough to drag down overall revenues by 1 percent.
Garmin shares tumbled $3.99, or 11 percent, to $33.49 in premarket trading.
The company reported a net income of $37.3 million, or 19 cents per share, for the three months ended in March, down from $48.5 million, or 24 cents per share, a year ago.
Excluding the impact of foreign currency swings and tax items, earnings came to 38 cents per share, up from 25 cents. That was shy of the 42 cents analysts expected, according to Thomson Reuters.
Overall revenue fell to $431.1 million from $436.7 million, well below the $484.5 million projected by analysts.
"The first quarter of 2010 provided mixed results but we view the overall trends in the business as positive indicators for the remainder of the year," CEO Min Kao said in a statement.
Weakness in the automotive and mobile segment was offset somewhat by better results in other Garmin businesses.
Revenue from its outdoor and fitness devices grew 28 percent. Its marine segment grew 9 percent and aviation was up 12 percent.
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