TomTom Shares Gain Most Since August After Raised 2014 Forecast

TomTom NV rose the most in eight months as the Dutch navigation-device maker raised its earnings forecast after first-quarter results beat estimates and the company sold more profitable sports watches.

The stock climbed as much as 11 percent in Amsterdam, the biggest intraday jump since August. First-quarter net income was 7.49 million euros ($10.4 million) compared with a loss of 2.27 million euros a year earlier and was helped by a one-time tax gain of 8.1 million euros. On average, analysts surveyed by Bloomberg had estimated a loss of 3.69 million euros.

TomTom raised its full-year forecast for adjusted earnings per share to about 25 euro-cents. The Amsterdam-based company previously predicted about 20 cents. Revenue from sports watches climbed more than 50 percent in the first quarter and this business has high margins, TomTom said today without disclosing total sales for the devices.

“Q1 was ahead of expectations and I think we need to reflect that in our outlook, hence the update on guidance,” Chief Executive Officer Harold Goddijn said on a conference call with reporter. He said that he wanted to maintain some caution for coming quarters because the first three months traditionally are a “small quarter.”

The earnings outlook was helped by the one-time tax settlement contributing 4 cents a share.

The stock rose 9.3 percent to 5.11 euros at 11:34 a.m., giving the company a market value of 1.13 billion euros and taking the advance to 48 percent in a year.

French Acquisition

First-quarter revenue at 205 million euros beat analysts’ 196 million-euro average estimate.

The company also announced today that it agreed to acquire French fleet management business DAMS Tracking from Diffusion Artistique et Musicale SAS to add 27,000 subscribers. In the first quarter TomTom had 348,000 fleet-management subscribers.

The acquisition’s effect on revenue will be “a few million I think for the total year, so not significant for the group as a whole,” Goddijn said. The deal is important as it strengthens TomTom’s position in France, he said.

The fleet-management market could double in size in the next two to three years, Goddijn said on the call.

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