TomTom Reports $1.3B Loss
By Amy Gilroy -- TWICE, 2/24/2009
‘s-Hertogenbosch, the Netherlands — Echoing Garmin's predictions yesterday for a flat portable GPS market this year, TomTom today said it expects 17 million personal navigation devices (PNDs) will sell in North America in 2009, the
TomTom also reported a significant loss of $1.3 billion in its fourth-quarter 2008 results today, reflecting a write down on the acquisition of Tele Atlas last year for $4.3 billion. TomTom said it took the one-time impairment charge because "the worsening macro environment means that currently we cannot sustain the full valuation of the acquired business of Tele Atlas as established at the time of the acquisition," according to its quarterly report. The company said, nevertheless, Tele Atlas remains "core to the strategy" of TomTom.
Excluding the $1.3 billion write down, TomTom reported a net profit of the U.S. dollar equivalent of $89 million for the quarter, ended Dec. 31, 2008, down from $127 million for the quarter a year ago. Revenue was $674 million for the quarter, compared with $888 million a year ago.
Tele Atlas revenue alone declined 11 percent for the quarter to $110 million and TomTom's revenue, excluding Tele Atlas, declined 25 percent for the quarter to $603 million, down from $808 million for the year-ago quarter.
TomTom's PND sales for the fourth quarter were 4.4 million units, up 4 percent from the year-ago quarter, and sales for the full-year 2008 were 12 million worldwide. The company said it expects to sell between 11 million and 12 million PNDs for 2009 and that its market share continues at 23 percent in the U.S. and 46 percent in Europe.
TomTom further announced it hopes to cut $77 million in costs in layoffs and reduced marketing and other expenses.
Cash and cash equivalents were reported at $408 million at the end of the quarter, with debt at more than $1.4 billion.
Harold Goddijn, TomTom CEO, said, "Despite the tough market conditions TomTom traded profitably and was significantly cash generative in the quarter. We expect trading conditions to continue to be challenging throughout 2009 and we are adjusting our cost base accordingly."
He reiterated that the penetration of PNDs remains low indicating future growth when the economy improves.
it expected for last year, although 2008's final tallies have not been announced.
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