July 22 (Bloomberg) -- TomTom NV, Europe’s largest maker of portable navigation devices, reported an unexpected second- quarter loss after writing down the value of assets to reflect a declining market for personal navigation devices.
The company reported a net loss of 489 million euros ($705 million) compared with profit of 34 million euros a year earlier. The average forecast of nine analysts surveyed by Bloomberg was net income of 10.7 million euros.
The company took an impairment charge of 512 million euros in the quarter “reflecting the reduced outlook” for the personal navigation device market. Of the charge, 473 million euros related to goodwill.
Sales decreased 13 percent to 314 million euros. The company on June 27 predicted revenue of 300 million euros to 310 million euros for the quarter.
TomTom on June 27 slashed its full-year profit and sales forecasts, saying U.S. demand for its devices had declined faster than anticipated and consumers were opting for cheaper navigation systems. The stock declined 27 percent the day after the announcement.
The shares have lost 54 percent this year, paring the Amsterdam-based company’s market value to 812 million euros. U.S. rival Garmin Ltd. has gained 5.6 percent this year.
TomTom, which competes with Garmin and Google Inc., aims to get more revenue from maps, services and built-in systems in cars amid a slowdown in sales of portable navigation devices, or PNDs.
Earnings per share will be in a range of 25 euro cents to 30 cents in 2011, excluding the goodwill impairment, TomTom said. The company in April predicted “broadly flat” earnings per share compared with EPS of 49 cents in 2010.
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