Garmin said it expects to sell fewer GPS navigation devices in 2013, with the company also forecasting full-year results below analysts’ estimates.
The announcement sent its shares down 12 percent to their lowest in more than a year. Garmin makes hand-held and car-mounted navigation devices that account for about half of its sales, but the company’s revenue from its struggling automotive mobile business is expected to fall 15 to 20 percent in 2013, Garmin said.
The U.S. manufacturer expects to sell about 20 percent fewer personal navigation devices in 2013, as it is not able to fight the overall decline in demand for the gadgets. The drop in popularity of personal navigation devices has forced Garmin and its Dutch rival TomTom to look for new areas of growth.
While TomTom invested in software and apps, Garmin focused on its fitness and outdoor products. TomTom announced last week that it expects earnings to drop by 50 percent this year because of weak sales of devices for cars and competition from providers of free maps.
Garmin’s net profit fell to $129.3 million in the fourth quarter, from $165.6 million a year earlier, while sales at its automotive/mobile business slipped to $437 million. Total revenue fell 16 percent to $910 million.