UPDATE 1-TomTom broadens revenue stream, no comment on M&A

* Q3 net profit 19 mln euros vs analyst average 25.1 mln

* Keeps full year guidance of broadly flat revenue, EPS

* Declines comment on possible takeover

* To deliver maps on HTC phones

* TomTom shares down 0.5 pct vs 0.8 pct Amsterdam index fall

(Adds comments by CFO, CEO and share price)

By Bate Felix

AMSTERDAM, Oct 20 (BestGrowthStock) – Dutch navigation device maker
TomTom (TOM2.AS: ) said on Wednesday it was broadening its revenue
base faced with competition from free navigation on smartphones
and declined to comment on possible takeover bids.

The company said its third-quarter net profit took a hit due
to a currency charge but maintained its full-year outlook
despite increased competition from free navigation software from
Google (GOOG.O: ) and Nokia (NOK1V.HE: ) smartphones.

The personal navigation device (PND) industry, led by TomTom
(TOM2.AS: ) and Garmin (GRMN.O: ), has been hit badly by competition
from navigation-enabled smartphones.

Garmin CFO Kevin Rauckman estimated last month that
smartphone competition was deflating annual PND sales.

Chief Executive Harold Goddijn said the company was happy
with its performance in the quarter.

“We are focused on broadening our revenue base and on
rolling out high quality content and services to our customers
and I am pleased with the progress we are making,” Goddijn said
in a statement.

TomTom Chief Financial Officer Marina Wyatt declined to
comment when asked on a conference call if TomTom was no longer
in talks with any companies wanting to take it over.

TomTom, which some analysts see as a takeover target for
Microsoft (MSFT.O: ), Google or Samsung (005930.KS: ), has turned
down a few offers, Goddijn said in a newspaper interview at the
start of the month [ID:nLDE6211HU] [ID:nLDE6871OT]

“We feel confident of the strategy as an independent
company,” Wyatt told reporters.

Maurice Mureau, asset manager at Keijser Capital said phone
makers, such as Samsung and HTC (2498.TW: ), would be more logical
candidates to buy TomTom than Google or Microsoft, although he
did not rule out the two U.S. firms as buyers.

“It could well be that they (TomTom) are currently in
takeover talks but are not allowed to talk about it,” Mureau


TomTom which makes personal navigation devices (PND), and
its main competitor Garmin (GRMN.O: ) have come under pressure
from Nokia and Google, which offer free navigation features on
their on their GPS-enabled smartphones.

A continued drop in average selling prices of PNDs due to
increased competition — also from navigation systems built
directly into cars — has also weighed on margins, and TomTom
has been shifting to sell more traffic services via its PNDs.

The firm also announced a phone location and navigation deal
with Taiwan’s HTC (2498.TW: ) on Wednesday, and said it was
looking to generate more revenue from live services, traffic and
weather information and speed camera information. [IDn:WEA3128]

TomTom kept its 2010 outlook for revenue and earnings per
share to be flat from 2009, when revenue was 1.48 billion euros
and earnings per share were 0.47 euro.

The firm’s revenue in the third quarter increased by 3
percent to 375 million euros, beating a mean estimate of 357
million euros in a Reuters poll of 12 analysts.

However, net profit fell 37 percent to 19 million euros, due
to a 20 million charge, mostly related to currency effects,
missing a mean estimate of 25.1 million in the poll.

TomTom shares were down 0.5 percent at 5.99 euros by 0950
GMT after sliding nearly 6 percent after market open. The
Amsterdam blue chip index (.AEX: ) was down 0.8 percent.

“Revenue was alright, a bit better than expected but because
of currency effects the net profit was disappointing. I think
that’s what weighing on the shares at the moment,” Keisjer’s
Mureau said.
(Additional reporting by Gilbert Kreijger; Editing by Karen
($1=.7264 Euro)

UPDATE 1-TomTom broadens revenue stream, no comment on M&A