October 16, 2019 / 7:12 AM / a month ago

UPDATE 1-TomTom Q3 core earnings beat expectations, revenues dip

(Recasts, adds details)

Oct 16 (Reuters) - Dutch mapping and navigation company TomTom beat forecasts with its third-quarter core earnings on Wednesday, helped by higher proportion of high margin software and content revenue.

TomTom reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of 15.9 million euros ($17.6 million), nearly double the 8 million euro figure analysts had forecast in a poll compiled by the company.

The Amsterdam-based company confirmed its full-year free cash flow outlook, while slightly toning down its 2019 revenue guidance, saying it would be “around 700 million euros” rather than “at least 700 million” as previously forecast.

Third-quarter revenue fell 7% to 164.2 million euros, missing expectations as TomTom deferred a larger portion of operational revenue year-on-year.

TomTom shares were down 0.6% in early trade.

TomTom, which is moving away from selling devices to software as a service (SaaS), is expecting now however around 425 million euros for its location technology business, down from 435 million euros previously.

During its capital markets day in September, the company said it expected to increase its revenue from location technologies, such as maps, to around 500 million euros by 2021.

The company has also boosted its adjusted earning per share forecast, expecting now 0.20 euro per share from 0.15 euro previously, the statement said.

“The adjusted EPS is now expected to be around €0.20 partly due to higher gross margin. We expect a gross margin of at least 70% in the year,” TomTom added.

Its gross margin for the quarter ended in September was 78% compared with 71% last year.

$1 = 0.9050 euros Reporting by Charles Regnier and Pawel Goraj; Editing by Muralikumar Anantharaman and Tomasz Janowski

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