Dutch satellite navigation and digital mapping company TomTom reported a bigger than expected drop in third-quarter revenue yesterday, as growth in its automotive services businesses failed to offset weakness in its consumer products division.
The company is betting big on services, such as the sale of maps and software to car makers, fleet management systems and technology for self-driving cars, as the popularity of portable navigation devices continues to wane.
The Amsterdam-based company’s revenue for the third quarter dropped by nine per cent to €218 million. Analysts on average expected €225 million.
It reported a net loss of €5.3 million for the quarter, hit by a one-off restructuring charge of €15.4 million related to its consumer sports division, which includes running and golf watches. The shares were down 1.5 per cent at €9.18.
The company also lowered its revenue forecast for the full year to about €900 million following the reorganisation of Consumer Sports. It had earlier expected revenue to come in at about €925 million.
Separately, TomTom announced its telematics arm – one of its fastest-growing business lines –has won a deal with Netherlands-based LeasePlan, the world’s largest vehicle-leasing firm, to provide software and services.
Financial terms were not disclosed, although TomTom said the partnership would have no material impact on this year’s results.
Under the deal, LeasePlan customers will be able to use TomTom’s cloud-based telematics and fleet management software, which helps businesses gather and analyse data on where their vehicles are, what services they need, planning routes and other logistics.