TomTom NV, the Dutch navigation device maker, said Thursday it turned a profit in the fourth quarter, following a loss a year earlier when took a big charge on its digital mapmaking operations.
Net profit for the fourth quarter of 2009 was euro73 million ($99 million), versus a loss of euro989 million a year earlier. Sales rose 1 percent to euro533 million.
In the fourth quarter of 2008, TomTom wrote off a third of the value of mapmaker Tele Atlas, which it had acquired for euro2.9 billion.
The buy proved disastrous for TomTom shareholders as the company was caught with high debt levels when economic recession set in, and it was forced to issue shares to avoid bankruptcy.
The company’s operating performance was mixed in the fourth quarter of 2009. It cut costs, and secondary business lines such as subscriptions to traffic information helped sales. However, average selling prices of TomTom’s core product — navigation devices placed on car windshields — fell 21 percent to euro79 apiece. That outweighed a 15 percent rise in sales volumes.
TomTom noted it increased market share in the United States, where it competes with larger rival Garmin Ltd., to 29 percent from 20 percent.
The company forecast sales for 2010 at about the same level as 2009, euro1.48 billion. It said it expected earnings per share of euro0.47.
TomTom warned that “free turn-by-turn navigation on some smartphone platforms will be available in our major markets.”
