TomTom NV, Europe's largest maker of navigation devices, said Wednesday its first quarter earnings fell sharply because of a decline in average selling prices and because retailers stocked fewer of its devices.
The Amsterdam-based company said net profit was 7.3 million (US$12 million), down from 44 million in the same period a year ago. Sales fell 22 percent to 92 million (US$147 million).
The poor numbers had been expected after TomTom issued a profit warning earlier this month that caused its shares to slide along with those of major competitor Garmin Ltd. of the Cayman Islands.
"The actual results provide little new insight," wrote Petercam analyst Eric de Graaf in a note on earnings. "If anything we are a bit disappointed."
Shares fell 7.7 percent to 20.88 (US$33.32).
CEO Harold Goddijn attributed the fall in selling prices and sales to European retailers selling off extra inventory after the holiday season more than they normally do in part because of worries about the economy.
He said retail sales in Europe and the U.S. was now "in line with expectations, considerably higher than it was last year _ that's all developing according to plan."
"We're looking forward to a good quarter two (second quarter)," he said.
TomTom said Wednesday it would push ahead with its planned 2.9 billion (US$4.6 billion) acquisition of digital mapmaker Tele Atlas NV and expects approval from the European Commission.
The commission is reviewing the deal carefully and a decision is due by May 21.
In the meantime, TomTom has built up a 29.9 percent stake in Tele Atlas and booked a loss of 4.6 million (US$7.4 million) on that stake this quarter.
TomTom said it sold 2 million personal navigation devices in the quarter _ a 50 percent increase from a year ago. However, average selling prices were 117 (US$187) per device _ a fall of 17 percent from the fourth quarter and down 43 percent from a year ago.
