TomTom Falls as Sales Forecast Misses Estimates: Amsterdam Mover
TomTom NV, Europe’s largest maker of portable navigation devices, declined the most in more than eight months after the company said sales will fall more than analysts estimated.
Sales will drop to a range of 900 million euros ($1.21 billion) to 950 million euros this year, the Dutch company said in a statement today. That would miss the 999.8 million-euro average estimate of 13 analysts and would be the lowest level since 2005, according to data compiled by Bloomberg. TomTom shares dropped as much as 10 percent, the biggest intraday decline since May 30.
“The guidance is disappointing relative to current estimates, which is what the market will focus on,” Martijn den Drijver, an analyst at SNS Securities, said in a note.
TomTom was down 7.5 percent at 11:52 a.m. in Amsterdam, bringing the decline to 8.2 percent this year and valuing Amsterdam-based TomTom at 773 million euros. The volume of shares traded was more than double the three-month daily average, according to data compiled by Bloomberg.
“It is too early to say if and when growth returns,” Chief Executive Officer Harold Goddijn said on a conference call, adding that future improvement should come from the automotive industry and map products for the fitness market.
Fourth-quarter sales fell 19 percent from a year earlier to 289 million euros as automotive revenue dropped 21 percent to 44 million euros and hardware revenue plunged 24 percent to 191 million euros. Licensing sales declined 7 percent to 37 million euros as revenue from third-party device vendors fell.
TomTom gets most of its revenue by selling hardware. It also supplies navigation applications to clients including Apple Inc. for the iPhone 5.
TomTom said its “core market” for personal navigation devices will shrink by 15 percent to 20 percent in volume in 2013. The market for such devices has plummeted in North America and Europe as consumers increasingly use navigation software on smartphones.
Automotive revenue is affected by “tough conditions” for clients in the European car market, TomTom said. “Automotive revenue will largely depend on the new car sales and take rates of our current partners,” the company said.
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