Navigation solutions provider TomTom, Monday reported a 24% fall in second-quarter net profit as year-on-year prices for its devices fell. The company reiterated its full-year outlook.

Sales rose 19%, with the number of devices sold up 70% on the year, and an average price increase of 12% quarter-on-quarter.

Chief Executive Officer Harold Goddijn said in a statement Monday: "Consumer demand for our products and services proved resilient in the face of difficult macro economic conditions."

"During the quarter we renewed our entire product range. The new products have been well received, which gives us a strong starting point for the second half of the year," he added.

Second-quarter net profit dropped to EUR52 million from EUR68 million in the same period last year, when the company reported an exceptionally strong set of results. The figure Monday beat analysts' average forecast of EUR42 million.

Second-quarter sales were EUR453 million, up 19% from last year's EUR380 million. Analysts had forecast EUR428 million.

TomTom shipped 3.1 million personal navigation devices in the second quarter, up 70% on the year. The average selling price fell 33% on the year to EUR131. The average price rose 12% compared to the first quarter of 2008, driven by new products and a reduction in promotional activities, TomTom said.

The Amsterdam-based company said that the results of recently acquired digital map maker TeleAtlas were consolidated into TomTom's accounts as of June, meaning just one month of TeleAtlas' earnings are included in the second quarter.

TomTom reiterated it's full-year outlook for the TomTom and TeleAtlas business units. TomTom has a EUR1.8 billion to EUR2 billion revenue target, and expects to report a 20% operating margin and a 40% gross margin. The company expects to sell 14 million to 15 million devices in 2008.

For the TomTom Group, including TeleAtlas, the company expects full year revenue of between EUR1.95 billion and EUR2.15 billion, with a margin of earnings before interest, tax, depreciation and amortization between 20% and 25%.

TomTom competes in the portable navigation device market with Cayman Islands-based Garmin.

TomTom shares Monday ended the day up EUR1.01, or 6.7%, at EUR16.05. TomTom shares have shed almost 70% year to date on a wide range of concerns. Uncertainty about the acquisition of TeleAtlas and worries about consumer demand in general hurt the stock. TomTom in April issued a profit warning ahead of first-quarter earnings, saying it had lowered prices earlier than expected.

Earlier this month TomTom shares fell further on worries the company may not be able to meet its debt obligations. Analysts at Goldman Sachs even suggested the company may have to raise fresh capital.

Source:Dow Jones