Reuters’ profits surpass forecasts

Thomson Reuters reported a higher-than-expected profit for the first quarter on strong sales in its tax and accounting division, and the company affirmed its outlook for the year.
By The Newsroom
Published 2nd May 2012, 07:00 BST

The global news and information provider said yesterday that first-quarter revenue from ongoing businesses grew 4 per cent before currency changes to $3.19bn (£1.96bn), above the analysts’ average forecast of $3.13bn.

Adjusted earnings per share rose to 44 cents from 37 cents a year earlier. That beat analysts’ average forecast of 41 cents per share.

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While the legal and tax & accounting divisions lifted overall results, the company’s business serving the financial industry remains under pressure from lay-offs and other cost cuts at banks.

The company said first-quarter revenue at its financial & risk division grew 1 per cent to $1.8bn, as declines in sales to traders and wealth managers were offset by increases in sales to risk and compliance customers, as well as acquisitions.

In contrast, the legal unit, which includes WestlawNext and competes with Reed Elsevier, Wolters Kluwer and Bloomberg, reported 3 per cent revenue growth to $777m. Tax & accounting posted revenue growth of 31 per cent to $310m.

“Our financial & risk business continues to make progress in a very difficult environment,” chief executive James Smith said. “We are executing against a more focused strategy.”

One of Thomson Reuters’ key financial products, Eikon, has struggled to gain traction with customers.