TomTom, the Dutch navigation equipment and digital map maker, said it will cut 50 million euros ($69.7 million) in costs, including jobs, to help improve profitability as it posted a dip in quarterly sales on lower demand and falling prices.
TomTom has struggled for months to overcome slumping demand for its flagship personal navigation devices (PNDs), as consumers opt for free or cheap navigation software as well as smartphones and tablet computers.
We have started a restructuring program which will focus our organization on the areas where we see the greatest potential for growth, of which Automotive and Content & Services are clear examples, said Chief Executive Harold Goddijn in a statement.
TomTom reported a 50 percent rise in third-quarter net profit to 29 million euros, up from 19 million euros from the same period last year. This was due in part to a currency gain mainly attributed to the depreciation of the euro against the U.S. dollar. Sales fell 10 percent to 336 million euros in the period.
A Reuters-commissioned poll had seen net profit at 12 million, on sales of 303 million for the quarter.
TomTom said it expects to report full-year results toward the upper end of its guidance for sales of between 1.225 billion euros and 1.275 billion euros and earnings per share (EPS) of between 0.25 and 0.30 euros excluding one-off charges.
Best known for its PNDs used by car and truck drivers, TomTom also sells live traffic services for its internet-connected devices and smartphone apps, mapping data as well as navigation units which are built into cars.
TomTom competes in the PND market with Garmin and in the commercial digital map market with Google and Navteq, which is owned by Nokia Oyj.
(Editing by Mike Nesbit)