Car production curbs hit TomTom amid chip shortage – Reuters

TomTom logo is seen on a vehicle in Eindhoven, Netherlands, November 21, 2019. REUTERS/Eva Plevier/File Photo
Oct 14 (Reuters) – Dutch navigation and digital mapping company TomTom (TOM2.AS) warned on Thursday supply chain problems in the auto sector could last until the first half of next year after it reported a bigger than expected quarterly core loss.
Auto production has been hammered by a global shortage in semiconductor chips, which has forced carmakers still recovering from last year's coronavirus disruptions to halt production again.
"Collectively we have underestimated how big the supply chain issues, and especially for semiconductor shortages, have been or have become", Chief Financial Officer Taco Titulaer told Reuters.
Titulaer added TomTom's consumer and automotive revenue numbers would continue to be affected by these challenges.
The group said the recovery of its automotive division, which supplies maps and navigation software to carmakers, lagged expectations as it saw sales fall 21% in the third quarter.
The consumer business, which sells automotive hardware such as portable navigation devices, beat a company-provided consensus but still saw a decline of 24% in the quarter.
The group's enterprise business, which provides maps, traffic information and navigation software to tech firms like Uber (UBER.N) and Microsoft (MSFT.O), saw sales grow 8% because of contract expansions from previous periods.
TomTom reiterated its 2021 revenue guidance, but said it would likely come in at the lower end of its 500-530 million euro range. It also lowered its annual free cash flow guidance from around 5% to around 2% of total revenue.
The Amsterdam-based company reported a third-quarter loss before interest, taxes, depreciation and amortisation of 5.3 million euros ($6.1 million), missing the 1-million-euro loss analysts had forecast.
($1 = 0.8630 euros)
Our Standards: The Thomson Reuters Trust Principles.
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Shares of Taiwan chip giant TSMC rose more than 3% on Friday after the firm posted higher-than-expected profit in the third quarter and flagged tight supplies will likely continue into 2022 amid booming demand during the COVID-19 pandemic.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Information, analytics and exclusive news on financial markets – delivered in an intuitive desktop and mobile interface.
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved