TomTom's Adjusted Net Income Nearly Doubles in Second Quarter
Navigation device maker TomTom (TMOAY) saw adjusted net income nearly double to €23.2 million ($25.6 million) in the second quarter of fiscal year 2016 from €12.4 million for the same time period last year, due to increases in content and services revenue, lower expenses, and one-off gains. Diluted adjusted earnings per share doubled to €0.10 from €0.05.
The Dutch company, whose products include map, traffic and software for cars as well GPS smart watches for individuals, saw revenue in the quarter remain more or less flat at €265.2 million compared with €264.6 million a year earlier.
Revenue declines in the consumer and licensing segments were offset by growth in the automotive and telematics segments.
The automotive segment offers car components that provide map and traffic information.
The telematics segment offers car-installed devices , which gives out information to track vehicle performances, fuel usage, and increase overall fleet efficiency. The segment provides services to both consumers as well as businesses such as the insurance and rental/leasing industries or car importers.
Meanwhile, gross margin expanded to 55% from 51% as the company enjoyed higher revenue generated from contents and services.
"Our automotive order intake is on track, and we are especially pleased that Volvo Cars selected us as global provider of maps, navigation and traffic," said TomTom chief executive officer Harold Goddijn. "In this quarter, Telematics added a record number of 27,000 vehicles to its installed base and signed an important agreement with PSA Group to offer value-added fleet management services."
Operating expenses dropped by €1.55 million to €133 million, while a positive outcome of a customs case led to a one-off gain.
Amsterdam-based TomTom maintained its outlook for the full year and expects adjusted EPS of around €0.23 on revenue of €1.05 billon.
TomTom shares advanced 2.6% to €7.04 in morning trading.