Trimble May Knock GPS Stocks (TRMB, GRMN, SIRF, NVT)

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Trimble (NASDAQ:TRMB) posted EPS of $0.29 non-GAAP on revenues of $296 million; First Call had estimates at $0.28 EPS on revenues of $299.7 million.  The company posted $0.22 GAAP EPS(on higher tax rates).  Operating income for the third quarter of 2007 was $43.8 million, up 21% from the third quarter of 2006. Operating margins in the third quarter of 2007 were 14.8 percent, compared to 15.5% in the third quarter of 2006 (on amortization costs).

Guidance was issued as well. Trimble expects revenue to grow 26% to 28% compared to the fourth quarter of 2006, with revenue between $295 million and $300 million (estimates are $296 million). Trimble expects fourth quarter 2007 GAAP earnings per share between $0.17 and $0.19 and non-GAAP earnings per share between $0.24 and $0.26 (estimates are $0.25). Its non-GAAP guidance use a 39 percent tax rate, compared to an actual 25 percent tax rate in the fourth quarter of 2006, and assume 126 million shares outstanding.

Unfortunately, Wall Street is expecting more out of GPS stocks now.  Now a decision has to be made to see if the laggard in the sector will carry over to the leaders.  TRMB is trading down 10% at $43.05 in after-hours trading after a 6% gain today.

NAVTEQ (NVT) shares are down but only marginally because of the Nokia buyout.  Shares of Garmin Ltd. (GRMN) are down 1.25% at $119.00 in after-hours trading, although shares closed up 4.6% today.  No trading has been seen in SiRF Tech (NASDAQ:SIRF).

Jon C. Ogg
October 23, 2007