Tom Tom Posts 53% Net Profit for Q3 – To Cut Costs

October 24 00:00 2011

New York, October 24 (RainbowNewsLine.com) – Amsterdam-based Tom Tom NV, the Dutch navigation-system maker, reported Monday a 53% increase in net profit for the third quarter. Although net profit was achieved because of lower financing costs, the company said that its sales fell 10% amid plunging demand for its consumer electronics and as such it is cutting costs.

Tom Tom which competes with Garmin Ltd., said that its net profit for the third quarter rose to €29 million ($40.3 million), compared to €19 million a year earlier. However, its sales fell 10% to €336 million, from €375 million. Its shares opened 10.7% higher on the results. Its sales had been hit by falling demand for personal navigation devices that accounted for almost half of its sales. The company said that it will cut costs by €50 million.

Chief Executive Harold Goddijn said in a statement, “We have started a restructuring program which will focus our organization on the areas where we see the greatest potential for growth, of which automotive and content and services are clear examples.”

TomTom said that it still expects full year sales of between €1.23 billion and €1.28 billion and confirmed its 2011 guidance for earnings per share of €0.25 to €0.30. Its shares closed Friday at €3.05, valuing the company at €677 million.

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