Sure, Garmin had a tough fourth quarter in 2008 but its full fiscal year was positive, giving the portable navigation device maker plenty of reason to giggle when main competitor TomTom announced its fourth quarter results today.
If you remember last year, the two companies ended up in a bidding war for the acquisition of digital mapping provider TeleAtlas. After pitching an initial bid of $2.6 billion, TomTom was up-ended by Garmin’s $3.3 billion bid. TomTom decided not to take any chances and ended up winning the rights to acquire TeleAtlas for $4.3 billion. The problem with such a big bid is that once the economy tanked, TeleAtlas wasn’t, and isn’t, worth nearly as much as the bidding price.
And that’s why TomTom announced a massive $1.34 billion charge to write off goodwill from the deal. Excluding the impairment charges, TomTom announced gross profits of $306 million on revenue of $679 million, a gross margin of 45 percent. Net profits for the fourth quarter were $90 million, earning shareholders diluted earnings per share of $0.73 excluding the writedown and restructuring expenses.
For the full year, diluted earnings per share were $1.49. Let’s just hope that TomTom doesn’t default on that already restructured TeleAtlas loan in 2009.
