TomTom trims revenue goal as European car sales fall
AMSTERDAM (Reuters) -- TomTom has trimmed its full-year revenue forecast, citing falling sales of its built-in car navigation devices in Europe.
Europe's largest navigation device maker and one of the top three digital map makers globally is trying to increase sales of its navigation gadgets and services to carmakers to offset the declining popularity of personal sat-navs.
But the European car market has been shrinking as a result of the region's debt crisis, with sales in September falling at their fastest pace in the last 12 months as government spending cuts bite and unemployment rises.
TomTom said on Tuesday it now expected 2012 revenue to be around 1.05 billion euros ($1.4 billion), down from an earlier forecast of 1.10 billion euros.
"The European economic situation is having a significant impact on the automotive industry. We expect our Automotive revenue to remain under pressure in the coming quarters," Chief Executive Harold Goddijn said in a statement on Tuesday.
TomTom's customers including PSA/Peugeot-Citroen, Renault and Fiat, have suffered some of the biggest declines in car sales in Europe.
TomTom reported a 23 percent fall in third-quarter net profit to 22 million euros.
SNS Securities analyst Martijn den Drijver said TomTom's car division was hit more than he expected due to much lower sales at Renault and Fiat, combined with new contract extensions not yet contributing to revenue.
Group revenue fell 19 percent from the same period last year, with a 24 percent fall at the consumer unit and a 16 percent drop at the automotive division.
TomTom shares have fallen from a record high of 56 euros in 2007 to 3.9 euros as smartphones with cheap or free navigation software hurts demand for its personal navigation devices.
Goddijn declined to give any outlook for PNDs or for the automotive sector next year and also declined to comment about recent problems raised by Apple customers about the quality of Apple's latest app for maps.
TomTom competes in the PND market with Garmin and in the commercial digital map market with Google and Nokia.Contact Automotive News