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The company said the contract to provide location and navigation
services to Volvo, which was announced in 2016, had been ended
before it was due to go into force in 2019.
That fed into fears of critics who said a deal Google <GOOGL.O>
made last month with Renault <RENA.PA>, another TomTom customer,
meant the company risked being relegated to third place in its
main market, with lower margins.
Volvo could not immediately be reached for comment on the
contract. ING analysts said in a trading note that they believe
the Swedish carmaker had switched to Google, rather than the
current leading player in the navigation market, HERE.
"Now that Google is making inroads, the mapping business has
become a three-player market with TomTom, HERE and Google, which
is clearly less attractive for TomTom than the two-player market
it was before," they said.
TomTom shares lost a quarter of their value in one day on Sept.
18 after Google announced a far-reaching supply deal with a
group of carmakers including Renault, Nissan <7201.T> and
Mitsubishi <7211.T>.
Though the Volvo news knocked shares lower, TomTom reported
better than expected third-quarter results on Tuesday, with core
earnings rising to 62.4 million euros ($72.2 million) from 35.5
million euros a year earlier.
A company-compiled consensus had seen earnings for the quarter
before interest, taxes, depreciation and amortization (EBITDA)
at 41 million euros.
Group sales were fractionally higher at 220 million euros, from
219 million euros in the third quarter of 2017.
While sales of the company's traditional satnav devices
continued to fall, that was offset by sales to carmakers and map
licensing to customers Apple <AAPL.O> and Uber [UBER.UL].
The company also raised its full-year revenue outlook to 850
million euros from 825 million euros.
TomTom this month announced plans to sell its fleet management
business, saying it would instead focus its energy on making
digital maps used in highly automated driving -- the business on
which it has pinned its future.
It said it has seen "strong interest" for the fleet subsidiary,
valued at roughly 700 million euros.
Chief executive and co-founder Harold Goddijn said recent new
deals with Peugeot <PEUP.PA> and BMW <BMWG.DE> showed the
viability of the company's products.
(Reporting by Toby Sterling; Editing by Subhranshu Sahu, Louise
Heavens and Jan Harvey
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