(Reuters) -Garmin beat quarterly revenue estimates and raised its annual forecast on Wednesday, helped by strength in fitness and auto segments, but mixed results in outdoor and aviation units sent its shares down more than 3%.
The Schaffhausen, Switzerland-based company posted a 2% fall in revenue in its outdoor segment and flat sales in the aviation, which represent the second- and third-largest divisions, respectively, for the company.
Garmin (NYSE:GRMN)'s robust portfolio and long-term agreements with clients across fitness, marine, aviation and original equipment manufacturers (OEM) have aided its revenue in the quarter.
In the second quarter, Garmin unveiled the Approach Z30 smart laser range for golfers and the smart cycling computer Edge 1050 for navigation and connectivity.
"I think we are also seeing a technical pullback on the stock with some investors selling into the good news as Garmin has reached its high point of nearly three years ago," said Michael Ashley Schulman, analyst at Running Point Capital.
Garmin's shares have risen 34% so far this year, with gains of about 19% in just the past three months.
Investors could also be concerned about the company's high effective tax rate, Schulman added.
The effective tax rate in the second quarter was 17.9% compared with 8.9% in the prior-year quarter.
Garmin's second-quarter revenue surged 14% to $1.51 billion, compared with analysts' average estimates of $1.42 billion, according to LSEG data.
The company also now expects full-year 2024 revenue to be approximately $5.95 billion, from earlier expectations of $5.75 billion.
Revenue in the quarter from the fitness segment increased 28% to $428.4 million, led by strong demand for advanced wearables such as Edge 1050 premium cycling computers.
The auto OEM segment's revenue rose 41% to $147.2 million, primarily due to increased demand for its domain controllers.
Garmin reported earnings per share of $1.56 compared with $1.50 a year earlier.