Navigation device maker TomTom has posted a healthy rise in earnings and strong growth in both the European and North America markets. For the first quarter the company posted a net profit of 44m euros ($60.1m), up 42% from 31m euros ($42m) a year ago. Sales rose 16% to 296m euros ($404m) from 256m euros ($350m) in the first quarter of 2006.
During the quarter it shipped 1.3 million portable navigation devices, up 75% from a year ago. This was mostly to the European market, which continues to grow strongly. However, TomTom is seeing accelerated PND growth in North America, where sales rose 121% from a year earlier. However, the average selling price fell to 204 euros ($278.5m) from 230 euros ($314) in the fourth quarter, reflecting increasing pricing pressures.
Amsterdam-based TomTom competes mostly against American rival, Garmin Ltd. TomTom estimated that during the first quarter it had a market share of 52% in Europe, and 25% in the North America market. This was from a market share of 50% (Europe) and 20% (North America) at the end of last year.
The global market for PNDs continues to show strong growth, said CEO Harold Goddijn. The growth was particularly strong in North Amercia, where the PND market is gathering momentum.
TomTom said it has the largest installed based of personal navigation users in the world, at around 10 million.
Looking forward, the company stuck to its guidance for the full year. It estimates that it will deliver revenues of between 1.6bn euros ($2.18bn) to 1.8bn euros ($2.46m), with a target gross margin of around 40% of revenue and an operating margin of around 20% of revenue. It expects volumes of PNDs to almost double to between 7 million and 8 million units.