Monday, July 31, 2006

Calls of Note Part 3

- Soleil's Peter C. Friedland is out with a good call on Garmin (NASDAQ:GRMN) saying that despite disappointing Q2 results thus far from the PND group " TOM2, SIRF, NVT and TA6 " they believe these stocks have been affected by issues that shouldn't impact Garmin. In fact, they believe the key datapoint from these reports for Garmin is that NAVTEQ reported 40% sequential growth in Q2 PND unit volume.

Given that Garmin is a key NAVTEQ PND customer, and that the firm believes Garmin has held its own in market share during the quarter, they believe it is reasonable to assume that Garmin posted at least 40% sequential PND unit growth, which is well above the 20% in Soleil's model. Therefore, assuming the stronger PND unit volume, and factoring in a modest haircut to their numbers based on recent weakness in the overall recreational marine market, they believe Garmin should post Q2 revenue of at least $400 million and EPS of $1.00-$1.05, well above the consensus $378 million and $0.94.

Notablecalls: I'm not sure Soleil has the following to generate a meaningful bounce but I think the note provides a roadmap of what kind of number GRMN is expected to post.

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