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TomTom net profit falls in Q3 on dollar moves

TomTom net profit falls in Q3 on dollar moves

TomTom NV, the Dutch maker of navigation devices, reported Wednesday a drop in profit for the third quarter, attributing it to unfavorable movements of the U.S. dollar against the euro.
Net profit was (EURO)19.3 million ($26.5 million), or (EURO)0.09 per share, down from (EURO)30.5 million and (EURO)0.14 per share in the same period a year ago. Revenues rose 3.6 percent to (EURO)374.9 million.
"While the relatively strong U.S. dollar compared to the euro negatively impacted our gross margin, the significant weakening of the dollar against the euro toward the end of the quarter negatively impacted our foreign exchange results," the company said in a statement. It took a (EURO)20 million charge as a result.
Chief executive Harold Goddijn said the company is winning contracts for sales to carmakers for in-dashboard devices, and it is increasing its base of subscribers for its business services.
TomTom said it won market share both in Europe, where it is the largest maker of portable navigation devices for cars, and in the U.S., where it trails rival Garmin Ltd. of the Cayman Islands by a large margin.
The company repeated financial forecasts for 2010 earnings to be at about the same level as 2009, (EURO)1.48 billion in sales and earnings per share of (EURO)0.47.
The company is gradually recovering from its ill-fated purchase of digital mapmaker Tele Atlas, which it bought for (EURO)2.9 billion in the fourth quarter of 2008.
TomTom was caught with high debt levels when economic recession set in, and it was forced to issue shares when they were at a low price to pay down debt and avoid bankruptcy.
Fat margins on portable devices are a thing of the past as hardware prices have come down and many mobile phones now offer basic navigation. TomTom hopes to differentiate itself with better devices and more sophisticated software, capable of using real-time traffic information to help drivers plan trips.
The company said its net debt is now (EURO)416 million, down from (EURO)442 million at the end of the second quarter.


Updated : 2021-10-27 22:04 GMT+08:00