UPDATE: Thomson Reuters 1Q Net, Revenue Rise On Merger
07 Mayo 2009 - 12:12PM
Noticias Dow Jones
Thomson Reuters Corp. (TRI) on Thursday reported a leap in
first-quarter revenue and earnings as the purchase of Reuters last
year added to results, but the company's businesses in the
financial world continued to struggle amid the economic
turmoil.
Shares of the information giant dropped 5.5% to $29.86 in recent
trading as it reiterated its full-year outlook, but showed results
in its markets division worsened from the prior quarter as
investment clients and financial institutions pared costs and
workers, lowering demand for services. Sales in the division, which
makes up roughly 60% of overall revenue, were down 7%, a steeper
fall than the fourth quarter, while profits were flat, compared to
a 7% gain in the previous quarter. Asia led revenue growth with a
5% rise while the Americas fell 4%.
Still, Thomson Reuters said it had been expecting the weakness,
and pointed out that excluding currency exchanges, revenue would
have edged up 0.4% in the quarter.
On its conference call with investors, the company also said a
more important result was that recurring subscription revenue was
up 2%, calling the number the "engine." High-margin transaction
revenue tumbled 12% and dragged down the segment, but the company
said that the subscription figure showed the slope of the decline
was not that steep.
"We are pleased that the large engine ... has shown a shallower
trend in the recession and therefore gives us confidence and some
of the visibility," Chief Executive Thomas Glocer said. "We still
feel positive for the year."
Thomson's profit for the quarter rose to $228 million from $194
million. But per-share earnings fell to 27 cents from 30 cents as
shares outstanding jumped 30% on the merger. Excluding acquisition
and other costs, profit fell to 40 cents from 44 cents, but was
better than the 35 cents analysts had been expecting, according to
a Thomson Reuters survey.
Revenue jumped 70% to $3.12 billion, short of the $3.18 billion
analysts were predicting.
The company's professional business recorded 2% revenue and
profit growth amid gains in online, software and services revenue.
Excluding currency exchanges, the revenue growth was 5%.
For Thomson Reuters' legal business, which includes the Westlaw
research service, revenue slipped 1% as law firms cut headcounts
and reduced spending, and fewer people took the bar exam because
lending for law students has all but dried up, Thomson said. Again,
excluding currency exchanges the revenue would have been positive,
up 3%, and profits rose 3%.
PiperJaffray analyst Peter Appert said the quarter was in line
with his expectations, and that he didn't really see any
surprises.
"They are navigating through a very challenging macro
environment and posting very respectable operating results," he
said.
Looking ahead, Thomson Reuters affirmed its full-year guidance,
though it added it will still be tough going. It said it expects
its legal division results to be positive for the year, despite a
majority of law firms planning to cut spending, and believed 2010
would be better for the legal business.
In the markets division, transaction revenue cannot be predicted
and the company said it couldn't be "clairvoyant" though it
continues to be confident the company as a whole will grow.
-By David Benoit and Mike Barris, Dow Jones Newswires;
201-938-2472; david.benoit@dowjones.com