Tomtom Profit Announcement

TomTom which is a navigation provider and is based in Amsterdam on Monday declared its net profit. The selling prices of the navigation devices continued to fall even after purchase of the personal navigation devices by more drivers. The main competitor of TomTom is Gramin but when Google and Nokia came in field earlier this year and started offering free navigation on the smart phones, both GPS companies came under pressure. It is reported that a small profit has been announced by the TomTom NV for the first quarter. €3 million ($4 million) was the net profit of the company that reveals that the profit per share is €0.01 which shows that the present quarter is the weakest quarter for the company. A year ago a loss of €37 million was seen in the same period. It has been forecasted by the company that the sales in 2010 will remain on the same level as it was in 2009. The sales in 2009 were €1.48 billion. The expected earnings per share by the company are €0.47.

According to TomTom the sales of the units has increased by 15% as compared to the last year. The amount of devices that they have sold this year is 1.6 million but the average selling price has decreased by 10% as compared to the last year’s average selling price. The average selling price is 89 Euros. The company had purchased digital mapmaker Tele Atlas in the fourth quarter of 2008. It was bought for €2.9 billion and there is a gradual recovery of the company from that ill-fated purchase. Due to the economic recession the debt on the company caught it as a result it had to issue the shares so that the debt could be paid and bankruptcy could be avoided. The company has decreased its interest payments from €31 million which was a year ago to €5.9 million in the first quarter as the net debt on the company was €492 million.

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