Big Earnings At TomTom - Raise Estimates
TomTom turned in some impressive numbers this last quarter as business is strong. Versus last yearin the same quarter, their revenue increased 288% on a unit volume increase of 606%, and profit was up 121%. Their margins were off a bit driven by the need to move out some of the older GO units to make room for the new ones. (Humm, maybe you'll see some rock bottom sale prices on the older TomTom GO's).
TomTom’s Chief Executive Officer, Harold Goddijn said, “2006 is off to a successful and exciting start. Market demand continues to be strong and TomTom increased unit sales seven-fold compared to the first quarter of 2005. In the first quarter we successfully secured the sell through of the current TomTom GO series ahead of the introduction of the new range. In Europe, we strengthened our market leadership position and increased our market share. In the US, we expanded our distribution strength through a substantial increase in the number of retail outlets we are present in.”
“In early March we launched the new TomTom GO range at a well-attended launch event in London, followed by CeBIT in Hanover. The positive market reception to the new range confirmed that TomTom continues to provide product and technology leadership in the portable navigation category. Our entry level product, the TomTom ONE continues to perform strongly. With the broad range of products covering the most important price points and with our widening geographic presence, we are gaining more confidence and visibility about the outlook for the year.”
“Based on our first quarter performance and the strong market reception to our next-generation products and services, we are increasing our outlook for 2006.”
TomTom mentions that they continue strong unit share in Europe in the face of strong competition (read “Garmin”), which will be interesting to see what Garmin says in their earnings release that is coming in the coming days.
Overall, their average selling price is lower than before, that TomTom credits to pushing through their older inventory, but I think we are seeing the movement of the market to a lower end product mix. Over the last year, average selling prices have dropped 30%. This is partially due to selling through but is also partially due to the warm reception of the TomTom One a low end GPS available in Europe.
So, there you go. Strong earnings for a company in the ever expanding GPS world.
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Posted by Scott Martin at April 26, 2006 1:34 PM