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TomTom first-quarter core profit defies loss estimates, with help from lower costs, location tech growth

·1-min read
TomTom logo is seen on a vehicle in Eindhoven

(Reuters) - Dutch navigation and digital mapping company TomTom on Wednesday reported better-than-expected quarterly core earnings, helped by lower operating expenses and growth in its location technology business.

The Amsterdam-based firm, whose customers range from major car companies to leading global tech firms, reported first-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) of 7.3 million euros ($8.73 million). Analysts had pencilled in a 3 million-euro loss for the period.

Revenue and net results also outstripped analyst expectations.

"We had a positive start to the year, showing solid progress in product development and attracting new customers," Chief Executive Harold Goddijn said in a statement.

The group's location technology business, which provides maps, traffic information and navigation software, saw sales grow 15%, boosted by its automotive division, which supplies the technology to carmakers.

But its consumer business, selling automotive hardware like portable navigation devices, fell 34% amid ongoing coronavirus pandemic travel restrictions and store closures.

The company reiterated its full-year outlook, but said it expects revenues to be more weighted to the second half of the year due to the supply chain constraints within the automotive industry.

It had previously guided for 2021 revenue of 520 million to 570 million euros, largely generated from the location technology business.

Carmakers have faced a shortage in semiconductor chips as they compete against the sprawling consumer electronics industry, amid a pandemic-led surge in demand for phones, TVs and gaming consoles.

($1 = 0.8362 euros)

(Reporting by Anait Miridzhanian and Sarah Morland in Gdansk; Editing by Christopher Cushing and Kenneth Maxwell)