Satnav maker TomTom warns on 2012 as smartphones dominate its market
STRUGGLING Dutch satellite navigation systems maker TomTom said sales and profit will continue to fall this year as more consumers opt for free software on smartphones, hitting its shares.
“The visibility in our core PND [personal navigation device] markets is limited as there remains great uncertainty about the rate of decline of customer demand for the category,” chief executive Harold Goddijn said yesterday.
TomTom, which posted quarterly results that met forecasts, said it expected 2012 revenue of around €1.1bn (£932m) and adjusted earnings per share of €0.35, compared with €1.27bn and €0.55 respectively in 2011.
Sales for 2012 had been forecast at €1.2bn. Fourth-quarter net profit fell 76 per cent to €12m, on sales down 31 per cent to €357m.
TomTom has struggled to overcome slumping demand for PNDs used by car and truck drivers, as smartphones become more prevalent. PND, its biggest division and which makes up around two thirds of group sales, saw quarterly sales fall 40 per cent.
TomTom had issued two profit warnings in 2011, in April and June, and announced cost cuts and a strategy shift in October.
It’s shares closed down 15 per cent yesterday at €3.75, valuing the company at around €957m.