Financial
$3 billion hit pushes Thomson Reuters into heavy loss
Thursday 09 February 2012
Thomson Reuters revealed a $3 billion charge on Thursday related to the declining value of its troubled financial services business, swinging the company to a steep quarterly operating loss.
The loss for last three months of 2011 was $2.59 billion, a sharp contrast to $307 million profit a year earlier.
The charge reflects turmoil in the group’s markets division, whose flagship desktop product Eikon has not been taken up by as many customers as forecast. That lead the division to report quarterly revenues just one per cent higher at $912 million. The company said there were now 15,000 active Eikon installations compared with 8,000 in September.
Thomson Reuters has suffered in the wake of the financial crisis, with customers in banking and finance laying off tens of thousands of employees and slashing costs.
It was the first quarterly report under James Smith, who took over as chief executive from Tom Glocer on 1 January following a series of management shake-ups.
“We have simplified our organisation; we have strengthened our management team; and we are making progress toward improving our execution capability,” the new CEO said in a statement.
The $3 billion charge was the result of the company’s annual goodwill testing. “This non-cash charge will not impact the company’s normal business operations, nor will it affect liquidity, cash flow from operations or financial covenants under the company’s outstanding public debt securities or syndicated credit facility,” it said.
Overall revenues for the quarter were up five per cent before currency changes to $3.35 billion, thanks to strong sales in the group’s legal and tax and accounting businesses.
Thomson Reuters said it expects 2012 revenue to grow in the low single digits.
“The guidance is prudent, as it should be,” Claudio Aspesi, senior analyst at Sanford Bernstein, told Reuters. “My concern is that headwinds in financial services will be very hard because employment will continue to be under pressure. Financial markets and legal both will be under continued revenue pressure in 2012 and beyond. At some point the question of whether the cost structure is in line will have to be answered,” he added.
Thomson Reuters said it intended to sell three businesses: Tax & Accounting's Property Tax Services; Legal's Law School Publishing business; and Financial & Risk's eXimius business, which is part of the Retail Wealth Management organisation. The three businesses combined had about $155 million of revenue in 2011.
● SOURCE Reuters | Financial Times
The loss for last three months of 2011 was $2.59 billion, a sharp contrast to $307 million profit a year earlier.
The charge reflects turmoil in the group’s markets division, whose flagship desktop product Eikon has not been taken up by as many customers as forecast. That lead the division to report quarterly revenues just one per cent higher at $912 million. The company said there were now 15,000 active Eikon installations compared with 8,000 in September.
Thomson Reuters has suffered in the wake of the financial crisis, with customers in banking and finance laying off tens of thousands of employees and slashing costs.
It was the first quarterly report under James Smith, who took over as chief executive from Tom Glocer on 1 January following a series of management shake-ups.
“We have simplified our organisation; we have strengthened our management team; and we are making progress toward improving our execution capability,” the new CEO said in a statement.
The $3 billion charge was the result of the company’s annual goodwill testing. “This non-cash charge will not impact the company’s normal business operations, nor will it affect liquidity, cash flow from operations or financial covenants under the company’s outstanding public debt securities or syndicated credit facility,” it said.
Overall revenues for the quarter were up five per cent before currency changes to $3.35 billion, thanks to strong sales in the group’s legal and tax and accounting businesses.
Thomson Reuters said it expects 2012 revenue to grow in the low single digits.
“The guidance is prudent, as it should be,” Claudio Aspesi, senior analyst at Sanford Bernstein, told Reuters. “My concern is that headwinds in financial services will be very hard because employment will continue to be under pressure. Financial markets and legal both will be under continued revenue pressure in 2012 and beyond. At some point the question of whether the cost structure is in line will have to be answered,” he added.
Thomson Reuters said it intended to sell three businesses: Tax & Accounting's Property Tax Services; Legal's Law School Publishing business; and Financial & Risk's eXimius business, which is part of the Retail Wealth Management organisation. The three businesses combined had about $155 million of revenue in 2011.
● SOURCE Reuters | Financial Times
Tom Glocer: ‘We’re not magicians’
Tuesday 01 November 2011
Benefits of the recent reorganisation at Thomson Reuters may not fully kick in until 2013, chief executive Tom Glocer said on Tuesday.
“We’re not magicians,” he said in an interview after the company reported a higher-than-expected rise in third-quarter profit and revenue.
Glocer was interviewed in New York by Reuters’ media correspondent Jennifer Saba who said he is under pressure from the board and the controlling shareholder, Canada's Thomson family, to increase the group’s market share, particularly for its financial industry products. Sources familiar with the board's thinking said in July he had about a year to make that happen, she reported.
In September Thomson Reuters said it would merge its two operating divisions – the strongly performing professional serving mainly lawyers and accountants, and the struggling markets, which targets banks and other financial institutions.
“We expect the benefit of these changes will improve sales performance in 2012 and benefit 2013 revenue growth,” Glocer said in a statement accompanying the Q3 release.
“What is clear at this point is that 2012 will not look particularly good,” said Claudio Aspesi, a London analyst. “Things are going to get worse before they get better ... even 2013 is a statement of optimistic faith in a recovery.”
Glocer said conditions remained tough in the financial markets. “But that’s not a good enough excuse as various competitors were still able to grow their businesses," he said in a memo to staff. The company would grow by driving sales in fast-growing markets and taking share in slower ones, he said.
As part of the September shakeup, James Smith, former head of the professional division, was elevated to the new role of chief operating officer, putting him in a strong position to succeed Glocer.
● SOURCE Reuters
“We’re not magicians,” he said in an interview after the company reported a higher-than-expected rise in third-quarter profit and revenue.
Glocer was interviewed in New York by Reuters’ media correspondent Jennifer Saba who said he is under pressure from the board and the controlling shareholder, Canada's Thomson family, to increase the group’s market share, particularly for its financial industry products. Sources familiar with the board's thinking said in July he had about a year to make that happen, she reported.
In September Thomson Reuters said it would merge its two operating divisions – the strongly performing professional serving mainly lawyers and accountants, and the struggling markets, which targets banks and other financial institutions.
“We expect the benefit of these changes will improve sales performance in 2012 and benefit 2013 revenue growth,” Glocer said in a statement accompanying the Q3 release.
“What is clear at this point is that 2012 will not look particularly good,” said Claudio Aspesi, a London analyst. “Things are going to get worse before they get better ... even 2013 is a statement of optimistic faith in a recovery.”
Glocer said conditions remained tough in the financial markets. “But that’s not a good enough excuse as various competitors were still able to grow their businesses," he said in a memo to staff. The company would grow by driving sales in fast-growing markets and taking share in slower ones, he said.
As part of the September shakeup, James Smith, former head of the professional division, was elevated to the new role of chief operating officer, putting him in a strong position to succeed Glocer.
● SOURCE Reuters
Thomson Reuters Q3 earnings beat estimates
Tuesday 01 November 2011
Thomson Reuters’ third-quarter profit rose by 10 per cent, higher than expected, as strength in its professional division offset weakness in the markets business.
The company, in Q3 results announced on Tuesday, reaffirmed its outlook for 2011 as its margins improved.
In September the company said it would merge the professional division, which serves mainly lawyers and accountants, with the struggling markets division, which targets banks and other financial institutions.
“We expect the benefit of these changes will improve sales performance in 2012 and benefit 2013 revenue growth,” chief executive Tom Glocer said in a statement.
Markets accounts for about 58 per cent of overall group revenue. The division posted revenue growth of just one per cent as banks continued to slash jobs and costs.
The company has also been hurt by the slow uptake of its new Eikon desktop product for traders and analysts, Reuters reported. It sold or migrated 32,000 Eikons by the end of September, up from 28,000 three months earlier.
“Conditions were challenging in some of our markets, but that’s not a good enough excuse as various competitors were still able to grow their businesses,” Glocer said in a memo to staff. The company would grow by driving sales in fast-growing markets and taking share in slower ones, he said.
In July Reuters reported sources familiar with board thinking saying Glocer was under pressure from directors and the company’s controlling shareholder, Canada’s Thomson family, to improve performance. At that time, sources said he had about a year to make that happen.
James Smith, former head of the professional division, was elevated to the new role of chief operating officer in September, putting him in a strong position to succeed Glocer.
Thomson Reuters reported third-quarter revenue of $3.26 billion, up five per cent before currency changes. Analysts had expected $3.23 billion.
Revenue in the professional division, which accounts for 42 per cent of overall revenue, increased 10 per cent after growing eight per cent in the second quarter. The one per cent revenue growth in markets was unchanged from the second quarter.
Adjusted earnings per share rose to 56 cents from 45 cents in the same quarter last year. Analysts had expected 53 cents.
Thomson Reuters said it still expects revenue to grow by a mid-single-digit percentage rate in 2011.
The company’s underlying operating margin improved to 22 per cent, from 21.2 per cent a year earlier.
Thomson Reuters shares have fallen 20 per cent this year, worse than the market at large.
● SOURCE Reuters
The company, in Q3 results announced on Tuesday, reaffirmed its outlook for 2011 as its margins improved.
In September the company said it would merge the professional division, which serves mainly lawyers and accountants, with the struggling markets division, which targets banks and other financial institutions.
“We expect the benefit of these changes will improve sales performance in 2012 and benefit 2013 revenue growth,” chief executive Tom Glocer said in a statement.
Markets accounts for about 58 per cent of overall group revenue. The division posted revenue growth of just one per cent as banks continued to slash jobs and costs.
The company has also been hurt by the slow uptake of its new Eikon desktop product for traders and analysts, Reuters reported. It sold or migrated 32,000 Eikons by the end of September, up from 28,000 three months earlier.
“Conditions were challenging in some of our markets, but that’s not a good enough excuse as various competitors were still able to grow their businesses,” Glocer said in a memo to staff. The company would grow by driving sales in fast-growing markets and taking share in slower ones, he said.
In July Reuters reported sources familiar with board thinking saying Glocer was under pressure from directors and the company’s controlling shareholder, Canada’s Thomson family, to improve performance. At that time, sources said he had about a year to make that happen.
James Smith, former head of the professional division, was elevated to the new role of chief operating officer in September, putting him in a strong position to succeed Glocer.
Thomson Reuters reported third-quarter revenue of $3.26 billion, up five per cent before currency changes. Analysts had expected $3.23 billion.
Revenue in the professional division, which accounts for 42 per cent of overall revenue, increased 10 per cent after growing eight per cent in the second quarter. The one per cent revenue growth in markets was unchanged from the second quarter.
Adjusted earnings per share rose to 56 cents from 45 cents in the same quarter last year. Analysts had expected 53 cents.
Thomson Reuters said it still expects revenue to grow by a mid-single-digit percentage rate in 2011.
The company’s underlying operating margin improved to 22 per cent, from 21.2 per cent a year earlier.
Thomson Reuters shares have fallen 20 per cent this year, worse than the market at large.
● SOURCE Reuters
Markets drag on 'healthy' Thomson Reuters results
Thursday 28 July 2011
Thomson Reuters reported sluggish growth in its markets division as the company struggles to accelerate adoption of a new flagship desktop for financial professionals.
Second-quarter results released on Thursday followed a management shakeout that resulted in the sudden departure of the ailing division’s chief Devin Wenig and five other high-level executives last week.
Chief executive Tom Glocer assumed direct responsibility for a turnaround in the division, which competes with Bloomberg, Dow Jones and FactSet Research. Division revenue excluding the impact of currency changes rose one per cent from a year earlier, slowing from the first quarter's gain of two per cent.
Overall revenue and earnings per share were within ranges the company announced last week when it became clear that improving the performance of the markets division was a priority for the board and controlling shareholder, Canada's Thomson family.
Glocer called the results “healthy” but noted this was due to strong growth in the professional division serving legal, accounting and other professionals. That unit’s revenue rose eight per cent excluding the impact of exchange rate changes.
“Nonetheless, revenue growth in our markets division is below our expectations, and I have decided to accelerate the transformation in markets,” Glocer said in a statement. “I am confident that these changes will result in improved performance.”
Total revenue excluding divestitures was $3.2 billion, up four per cent before currency adjustments and slightly ahead of the average analyst forecast. Adjusted earnings per share rose to 51 cents from 41 cents.
Many financial clients are still recovering from the global economic crisis, with job cuts and pullbacks in spending. This is hindering sales of Eikon, a new desktop platform which is aimed at pulling together dozens of disparate legacy products.
The company said it had sold more than 28,000 Eikon desktops since the launch last September. About 3,500 are to new users, meaning that only about 24,500 of the company's roughly 500,000 financial markets users have migrated to the new product.
Reuters’ own coverage of the results said the organisational changes have thrown into question how quickly Thomson Reuters can fast-track growth in markets, which accounted for 59 per cent of the company's revenue in the second quarter.
Glocer is preparing a plan to boost the division’s revenue growth rate and plans to present it to the board in the next two months, Reuters said. “He will have about a year to make it work, according to several people familiar with the board’s thinking.”
The markets shakeup dominated Glocer’s earnings call with analysts who wanted to know how and when things will turn around. He pleaded for some patience in fixing the division and discussed a 30-day plan, which involves reorganising the roles of its sales staff, and a 90-day plan, which entails repositioning the product line. On top of that, there is a year-plus plan that calls for developing a broader strategy around Eikon and Elektron, an ultra-high speed data distribution network.
“Any time you do this level of transformation, people need time to get their sea legs,” Glocer said. “So, in the short term, we expect some disruption. At the same time, we expect a lot of excitement on people moving forward with the new strategy in place.”
Asked if his direct management of markets is an interim measure or a permanent one, he said, “Permanent is a long time. I’m the ninth chief executive of Reuters in 160 years.”
Thomson Reuters shares, which have tumbled in recent days, rose by 3.5 per cent after today’s results.
● SOURCE Reuters | PaidContent
Second-quarter results released on Thursday followed a management shakeout that resulted in the sudden departure of the ailing division’s chief Devin Wenig and five other high-level executives last week.
Chief executive Tom Glocer assumed direct responsibility for a turnaround in the division, which competes with Bloomberg, Dow Jones and FactSet Research. Division revenue excluding the impact of currency changes rose one per cent from a year earlier, slowing from the first quarter's gain of two per cent.
Overall revenue and earnings per share were within ranges the company announced last week when it became clear that improving the performance of the markets division was a priority for the board and controlling shareholder, Canada's Thomson family.
Glocer called the results “healthy” but noted this was due to strong growth in the professional division serving legal, accounting and other professionals. That unit’s revenue rose eight per cent excluding the impact of exchange rate changes.
“Nonetheless, revenue growth in our markets division is below our expectations, and I have decided to accelerate the transformation in markets,” Glocer said in a statement. “I am confident that these changes will result in improved performance.”
Total revenue excluding divestitures was $3.2 billion, up four per cent before currency adjustments and slightly ahead of the average analyst forecast. Adjusted earnings per share rose to 51 cents from 41 cents.
Many financial clients are still recovering from the global economic crisis, with job cuts and pullbacks in spending. This is hindering sales of Eikon, a new desktop platform which is aimed at pulling together dozens of disparate legacy products.
The company said it had sold more than 28,000 Eikon desktops since the launch last September. About 3,500 are to new users, meaning that only about 24,500 of the company's roughly 500,000 financial markets users have migrated to the new product.
Reuters’ own coverage of the results said the organisational changes have thrown into question how quickly Thomson Reuters can fast-track growth in markets, which accounted for 59 per cent of the company's revenue in the second quarter.
Glocer is preparing a plan to boost the division’s revenue growth rate and plans to present it to the board in the next two months, Reuters said. “He will have about a year to make it work, according to several people familiar with the board’s thinking.”
The markets shakeup dominated Glocer’s earnings call with analysts who wanted to know how and when things will turn around. He pleaded for some patience in fixing the division and discussed a 30-day plan, which involves reorganising the roles of its sales staff, and a 90-day plan, which entails repositioning the product line. On top of that, there is a year-plus plan that calls for developing a broader strategy around Eikon and Elektron, an ultra-high speed data distribution network.
“Any time you do this level of transformation, people need time to get their sea legs,” Glocer said. “So, in the short term, we expect some disruption. At the same time, we expect a lot of excitement on people moving forward with the new strategy in place.”
Asked if his direct management of markets is an interim measure or a permanent one, he said, “Permanent is a long time. I’m the ninth chief executive of Reuters in 160 years.”
Thomson Reuters shares, which have tumbled in recent days, rose by 3.5 per cent after today’s results.
● SOURCE Reuters | PaidContent
Thomson Reuters streamlines markets division, Devin Wenig bows out
Thursday 21 July 2011
Chief executive Tom Glocer will assume responsibility for the division.
The company reaffirmed its 2011 outlook and said it expects to report second-quarter ongoing revenues of between $3.1 billion and $3.2 billion, up four per cent. Wall Street is looking for $3.15 billion in the Q2 results due to be announced on 28 July.
The markets division, which serves the financial services industry, will be simplified to three business units from four to help accelerate growth, the company said. The sales and trading, and investment and advisory units will be combined.
The company gave no reason for Wenig’s departure beyond saying it was “coincident with these organizational changes”. He joined Reuters in 1993. Before becoming chief executive of markets he was chief operating officer of Reuters prior to the 2008 takeover by Thomson.
Glocer said the changes were aimed at accelerating growth “as we flatten our organization to operate as an integrated company and unleash cross-company capabilities and operating synergies”.
The Financial Times said Wenig’s unexpected exit was seen by industry members as a sign that Woodbridge, the Thomson family’s holding company that manages its 55 per cent ownership of Thomson Reuters, was seeking faster change after 12 months in which the group’s shares have fallen by 9.9 per cent.
● SOURCE Reuters | Press Release | Financial Times
Revenue up, Thomson Reuters plans sales to raise cash for core business
Thursday 28 April 2011
Thomson Reuters' revenue growth accelerated in the first quarter as it reaped benefits from heavy spending on new products, and the company plans to sell two more businesses to fund further investment.
It expects to raise about $1 billion from the sale of its enterprise risk management and investment accounting software businesses, the company said on Thursday, along with previously announced sales of its BARBRI legal courses product and Scandinavian legal and tax and accounting units.
Chief executive Tom Glocer said the funds would be reinvested in the core business.
Announcing Q1 2011 financial results, the company said revenue from ongoing businesses was $3.2 billion, up five per cent before currency adjustments, quickening from four per cent growth in the previous quarter.
“I am pleased with our solid results for the first quarter,” Glocer said in a statement accompanying the results. “2011 is playing out much as we anticipated, with accelerating revenue growth which will drive expanded margins and higher cash flow as the year progresses... Based on our good start to the year, we are confident that we will deliver on our expectations for the full year.”
The company reaffirmed its 2011 forecast for mid-single digit revenue growth. It also reiterated that the operating profit margin is expected to increase by at least 100 basis points this year.
First quarter underlying profit increased one per cent, with a corresponding margin of 17.2 per cent. Excluding a $39 million one-time charge, the underlying profit margin was 18.4 per cent compared with 18 per cent in the same period last year.
Adjusted earnings per share, including the one-time charge, rose to 39 cents from 36 cents in the same quarter last year.
Professional division revenue increased eight per cent to $1.38 billion, driven by a 10 per cent increase in legal revenue. The WestlawNext legal database has been sold to more than 18,500 customers since its launch in February 2010, representing 34 per cent of Westlaw's revenue base, the company said.
In the markets division, which competes with Bloomberg and Dow Jones, revenue rose two per cent to $1.87 billion.
● SOURCE Reuters
It expects to raise about $1 billion from the sale of its enterprise risk management and investment accounting software businesses, the company said on Thursday, along with previously announced sales of its BARBRI legal courses product and Scandinavian legal and tax and accounting units.
Chief executive Tom Glocer said the funds would be reinvested in the core business.
Announcing Q1 2011 financial results, the company said revenue from ongoing businesses was $3.2 billion, up five per cent before currency adjustments, quickening from four per cent growth in the previous quarter.
“I am pleased with our solid results for the first quarter,” Glocer said in a statement accompanying the results. “2011 is playing out much as we anticipated, with accelerating revenue growth which will drive expanded margins and higher cash flow as the year progresses... Based on our good start to the year, we are confident that we will deliver on our expectations for the full year.”
The company reaffirmed its 2011 forecast for mid-single digit revenue growth. It also reiterated that the operating profit margin is expected to increase by at least 100 basis points this year.
First quarter underlying profit increased one per cent, with a corresponding margin of 17.2 per cent. Excluding a $39 million one-time charge, the underlying profit margin was 18.4 per cent compared with 18 per cent in the same period last year.
Adjusted earnings per share, including the one-time charge, rose to 39 cents from 36 cents in the same quarter last year.
Professional division revenue increased eight per cent to $1.38 billion, driven by a 10 per cent increase in legal revenue. The WestlawNext legal database has been sold to more than 18,500 customers since its launch in February 2010, representing 34 per cent of Westlaw's revenue base, the company said.
In the markets division, which competes with Bloomberg and Dow Jones, revenue rose two per cent to $1.87 billion.
● SOURCE Reuters
Earnings up, Thomson Reuters forecasts higher revenue this year
Thursday 10 February 2011
The improved outlook reflects signs that the group’s financial and professional customers are recovering from the recession. A year ago Thomson Reuters was under pressure as those customers cut spending and employees.
“A shock like the world went through leaves a caution that hangs around for a while,” chief executive Tom Glocer said in an interview with Reuters on Thursday. “But there’s no question that the conditions themselves are getting better in many of our markets.”
The improving economy and new services helped lift Q4 earnings to $225 million, or 27 cents per share, up from $182 million, or 21 cents per share, a year earlier. Q4 adjusted earnings per share of 43 cents missed the average analyst forecast of 46 cents.
Revenue climbed three per cent to $3.46 billion. Analysts expected $3.44 billion. Full-year earnings came to $933 million, or $1.08 per share, up from $867 million, or $1.01 per share, in 2009. Revenue ended essentially flat at $13 billion.
Highlighting the brighter outlook, the company raised its annual dividend by seven per cent to $1.24 per share.
Thomson Reuters has invested heavily in new products such as financial desktop Eikon, online video news service Reuters Insider and legal database service WestlawNext. Glocer said these investments would pay off in 2011. “With this period of heavy investment now successfully completed and our markets improving, we have set our sights on accelerating growth and delivering strong returns on our investments,” he said in a statement. “We have targeted mid-single-digit revenue growth for 2011, accompanied by strongly expanding margins and increasing levels of free cash flow.”
Thomson Reuters’ New York-listed shares have risen 11.6 per cent so far in 2011. The Toronto-listed shares are up 10.8 per cent.
In an internal message, Glocer told staff: “I am proud of what we accomplished, but very clear that much remains to be done, and mindful that we need to accelerate the pace of change.”
Growth and efficiency would remain priorities for 2011 “and we will aspire to excellence in all that we do. We have the ability, and therefore the mandate, to go from good – or in some cases maybe just OK – to truly excellent in areas such as:
● “Establishing a winning performance culture, and strengthening talent and engagement across the company;
● “Becoming hands-down the world’s best news organisation; the organisational changes I wrote about earlier this week will advance this goal;
● “Delivering customer service that truly delights our customers; customers are the ultimate judges of a company’s excellence;
● “Delivering the most innovative platform-based products which embody deep customer insight; and
● “Ensuring that our capital and talent is focused on the highest-value opportunities.
“Our commitment to excellence should also extend to our respect for our colleagues, communities and the environment. If each of the 55,000 of us achieves his or her own personal excellence, and we align our efforts, we will be unstoppable.
“We have turned the corner on growth. Now let’s reach for excellence.”
● SOURCE Thomson Reuters | Reuters
Thomson Reuters shares raised to 'sector outperformer'
Monday 31 January 2011
Investment bank CIBC raised its rating on Thomson Reuters to “sector outperformer” from “sector performer”, saying it sees signs of a more concrete recovery for the group.
With growth prospects on the horizon, product investments and Reuters synergy efforts, analyst Robert Bek said he expects the company to increase its revenue.
“We expect Thomson Reuters to soon post outsized revenue gains, material operating leverage benefits, and large free cash flow generation,” he wrote in a note to clients. “The current valuation does not yet reflect this potential.”
The company has invested $1 billion in initiatives including online financial video news service Reuters Insider and Eikon, a desktop trading terminal for financial professionals.
The analyst said the company still trades light of its longer-term trends. He added that he sees room for reversion towards historical ranges as fundamentals firm up.
“We continue to believe that Thomson Reuters should be a core holding for investors, with a handful of evidence pointing to a more concrete recovery and a fourth-quarter dividend increase expected,” said Bek, who raised his price target on the stock to $45 from $41.
Thomson Reuters shares have gained about 12 per cent since mid-November, closing at just over $40 on Monday. Results for 2010 Q4 and full year are due to be announced on 10 February.
● SOURCE Reuters
With growth prospects on the horizon, product investments and Reuters synergy efforts, analyst Robert Bek said he expects the company to increase its revenue.
“We expect Thomson Reuters to soon post outsized revenue gains, material operating leverage benefits, and large free cash flow generation,” he wrote in a note to clients. “The current valuation does not yet reflect this potential.”
The company has invested $1 billion in initiatives including online financial video news service Reuters Insider and Eikon, a desktop trading terminal for financial professionals.
The analyst said the company still trades light of its longer-term trends. He added that he sees room for reversion towards historical ranges as fundamentals firm up.
“We continue to believe that Thomson Reuters should be a core holding for investors, with a handful of evidence pointing to a more concrete recovery and a fourth-quarter dividend increase expected,” said Bek, who raised his price target on the stock to $45 from $41.
Thomson Reuters shares have gained about 12 per cent since mid-November, closing at just over $40 on Monday. Results for 2010 Q4 and full year are due to be announced on 10 February.
● SOURCE Reuters
Thomson Reuters’ Q3 profit up 65% as revenue resumes growth
Thursday 28 October 2010
Thomson Reuters’ third-quarter profit jumped 65 per cent as revenue started growing for the first time in a year, the company reported on Thursday.
Raising its full-year revenue forecast, Thomson Reuters said that, based on year-to-date performance and improved momentum, it now sees 2010 revenue being flat to slightly up rather than flat to slightly down. The company has been slowly recovering from last year's downturn, which squeezed the financial companies and law firms that subscribe to its services. The rebound is moving faster than it had forecast.
“We're past the bottom and on the way back up,” said Tom Glocer, chief executive.
Underlying operating profit fell four per cent to $681 million, mainly due to investment in new products, causing the operating profit margin to slip slightly to 21 per cent. Thomson Reuters has invested $1 billion in initiatives including Insider, an online financial video news service, and Eikon, a desktop trading terminal that it sells to financial professionals.
The markets division, which includes financial products such as trading terminals and the Reuters news service, suffered the worst of the recession as the hard-hit financial sector shed jobs. It saw a modest one per cent revenue uptick during the quarter, excluding the effect of currency swings. Including currency, revenue slipped one per cent to $1.85 billion.
The professional division, which includes services for law, tax and accounting firms and for the health care and sciences industries, grew revenue five per cent to $1.41 billion.
Overall, the company reported net income rose to $268 million, or 32 cents per share, in the quarter ended 30 September, up from $162 million, or 19 cents per share, a year earlier. Adjusted earnings per share rose to 49 cents from 43 cents a year earlier because of lower integration costs related to Thomson's purchase of Reuters in 2008. Analysts, on average, were expecting earnings of 44 cents per share.
Revenue edged up one per cent to $3.26 billion from $3.22 billion a year ago. The average forecast was $3.2 billion.
“People who understand how our subscription model works will figure out that positive net sales this far into the year will imply revenue growth next year other than in the most extraordinary circumstances,” Glocer said.
● SOURCE Reuters
Raising its full-year revenue forecast, Thomson Reuters said that, based on year-to-date performance and improved momentum, it now sees 2010 revenue being flat to slightly up rather than flat to slightly down. The company has been slowly recovering from last year's downturn, which squeezed the financial companies and law firms that subscribe to its services. The rebound is moving faster than it had forecast.
“We're past the bottom and on the way back up,” said Tom Glocer, chief executive.
Underlying operating profit fell four per cent to $681 million, mainly due to investment in new products, causing the operating profit margin to slip slightly to 21 per cent. Thomson Reuters has invested $1 billion in initiatives including Insider, an online financial video news service, and Eikon, a desktop trading terminal that it sells to financial professionals.
The markets division, which includes financial products such as trading terminals and the Reuters news service, suffered the worst of the recession as the hard-hit financial sector shed jobs. It saw a modest one per cent revenue uptick during the quarter, excluding the effect of currency swings. Including currency, revenue slipped one per cent to $1.85 billion.
The professional division, which includes services for law, tax and accounting firms and for the health care and sciences industries, grew revenue five per cent to $1.41 billion.
Overall, the company reported net income rose to $268 million, or 32 cents per share, in the quarter ended 30 September, up from $162 million, or 19 cents per share, a year earlier. Adjusted earnings per share rose to 49 cents from 43 cents a year earlier because of lower integration costs related to Thomson's purchase of Reuters in 2008. Analysts, on average, were expecting earnings of 44 cents per share.
Revenue edged up one per cent to $3.26 billion from $3.22 billion a year ago. The average forecast was $3.2 billion.
“People who understand how our subscription model works will figure out that positive net sales this far into the year will imply revenue growth next year other than in the most extraordinary circumstances,” Glocer said.
● SOURCE Reuters
Thomson Reuters refinances bonds at lower rate
Thursday 16 September 2010
Thomson Reuters raised C$750 million from an issue of 10-year bonds, almost double the C$400 million minimum targeted.
The Wall Street Journal reported that the issue was priced at 143.6 basis points over the government of Canada 3.5 per cent June 2020 benchmark bond for a yield of 4.398 per cent. The bonds carry a coupon of 4.35 per cent.
Thomson Reuters said the offering is expected to close on 30 September. It plans to use the net proceeds from the offering, available cash and/or other resources to repay other corporate debt – EUR 500 million principal amount of 4.625 per cent medium term notes upon their maturity in November 2010.
The Globe and Mail of Toronto said the old debt was the last of Reuters PLC paper that was absorbed when Thomson and Reuters merged in 2008, according to Moody’s, which assigned the debt a Baa1 rating. After the refinancing, all of the company’s debt will bear the Thomson Reuters name.
Fitch Ratings assigned the new note an A- rating, reflecting the company’s cash flow generating ability, sound balance sheet and consistent and conservative financial policies. It said it believes Thomson Reuters “has the flexibility to address upcoming maturities, make smaller prudent acquisitions and participate in some share repurchase activity”.
In August Standard & Poor's lifted its outlook on Thomson Reuters to stable in response to the company's improved operating performance.
● SOURCE The Wall Street Journal | MarketWatch | The Globe and Mail
The Wall Street Journal reported that the issue was priced at 143.6 basis points over the government of Canada 3.5 per cent June 2020 benchmark bond for a yield of 4.398 per cent. The bonds carry a coupon of 4.35 per cent.
Thomson Reuters said the offering is expected to close on 30 September. It plans to use the net proceeds from the offering, available cash and/or other resources to repay other corporate debt – EUR 500 million principal amount of 4.625 per cent medium term notes upon their maturity in November 2010.
The Globe and Mail of Toronto said the old debt was the last of Reuters PLC paper that was absorbed when Thomson and Reuters merged in 2008, according to Moody’s, which assigned the debt a Baa1 rating. After the refinancing, all of the company’s debt will bear the Thomson Reuters name.
Fitch Ratings assigned the new note an A- rating, reflecting the company’s cash flow generating ability, sound balance sheet and consistent and conservative financial policies. It said it believes Thomson Reuters “has the flexibility to address upcoming maturities, make smaller prudent acquisitions and participate in some share repurchase activity”.
In August Standard & Poor's lifted its outlook on Thomson Reuters to stable in response to the company's improved operating performance.
● SOURCE The Wall Street Journal | MarketWatch | The Globe and Mail
S&P lifts Thomson Reuters outlook on improved performance
Thursday 19 August 2010
Standard & Poor's lifted its outlook on Thomson Reuters to stable from negative, citing improved operating performance.
The ratings agency noted other positive developments including the view that the Reuters integration will be successfully completed next year and that credit ratios will remain in line with S&P's expectations in the medium term.
Thomson Reuters' A- rating largely reflects what S&P views as the group’s strong business-risk profile, expanded product portfolio following the $16 billion acquisition of Reuters in 2008 and geographic diversity.
In S&P's opinion, the benefits of the integration are partially offset by Thomson Reuters' credit protection measures, which it said are somewhat weak for the ratings, and the sizeable annual dividend, which reduces free cash flow.
S&P said it could consider raising the company's ratings if Thomson Reuters was able to demonstrate continued strengthening of its operating performance and credit measures. A downgrade could occur if the group’s performance falls below S&P's expectations or if the company faces significant difficulties completing the Reuters integration.
In July Thomson Reuters reported its second-quarter profit fell 8.6 per cent to 35 cents per share from 38 cents a year earlier on lower revenue from its markets division, although the company said it expected total revenue to grow in the current quarter. The stock is up 9.6 per cent this year.
The company's next quarterly earnings report is scheduled on 28 October.
● SOURCE Business Week
The ratings agency noted other positive developments including the view that the Reuters integration will be successfully completed next year and that credit ratios will remain in line with S&P's expectations in the medium term.
Thomson Reuters' A- rating largely reflects what S&P views as the group’s strong business-risk profile, expanded product portfolio following the $16 billion acquisition of Reuters in 2008 and geographic diversity.
In S&P's opinion, the benefits of the integration are partially offset by Thomson Reuters' credit protection measures, which it said are somewhat weak for the ratings, and the sizeable annual dividend, which reduces free cash flow.
S&P said it could consider raising the company's ratings if Thomson Reuters was able to demonstrate continued strengthening of its operating performance and credit measures. A downgrade could occur if the group’s performance falls below S&P's expectations or if the company faces significant difficulties completing the Reuters integration.
In July Thomson Reuters reported its second-quarter profit fell 8.6 per cent to 35 cents per share from 38 cents a year earlier on lower revenue from its markets division, although the company said it expected total revenue to grow in the current quarter. The stock is up 9.6 per cent this year.
The company's next quarterly earnings report is scheduled on 28 October.
● SOURCE Business Week
Thomson Reuters Q2 profit falls, sees Q3 revenue growth
Thursday 29 July 2010
Thomson Reuters reported lower quarterly profit and revenue slightly below Wall Street expectations on Thursday but said sales trends pointed to a return to revenue growth this quarter.
The second quarter results show that the group is gradually emerging from the shadow of the financial crisis, which triggered layoffs on Wall Street and cancellations of subscriptions to trading terminals and products for legal professionals, Reuters reported.
Underlying operating profit fell 17 per cent in Q2 to $655 million, and adjusted earnings per share fell to 47 cents from 58 cents a year earlier, slightly below analysts’ forecasts. Revenue from ongoing businesses fell two per cent to $3.22 billion.
"While our markets are only slowly improving, we have seen accelerating results in terms of revenues, net sales and customer uptake of our new products," chief executive Tom Glocer said in a statement. "Based on these encouraging trends, we expect that Thomson Reuters will return to revenue growth in the third quarter."
The company reiterated its forecast that 2010 revenue would be flat to slightly down compared with 2009, and that net sales would strengthen this year.
While net sales improved, revenue was still down year-on-year due to the delayed impact of cancelled subscriptions.
In the markets division, which serves the financial industry, revenue fell four per cent from the same quarter a year earlier. Revenue from the division was up from the first quarter, excluding adjustments for currency, marking the second consecutive quarter of sequential growth.
Revenue rose two per cent in the professional division, which sells databases and other information reservoirs to lawyers, accountants, scientists and healthcare workers.
The Reuters news agency business reported a three per cent fall in revenue, but net sales turned positive after it won a contract with CNN.
● SOURCE Reuters | Thomson Reuters press release | Earnings call transcript
The second quarter results show that the group is gradually emerging from the shadow of the financial crisis, which triggered layoffs on Wall Street and cancellations of subscriptions to trading terminals and products for legal professionals, Reuters reported.
Underlying operating profit fell 17 per cent in Q2 to $655 million, and adjusted earnings per share fell to 47 cents from 58 cents a year earlier, slightly below analysts’ forecasts. Revenue from ongoing businesses fell two per cent to $3.22 billion.
"While our markets are only slowly improving, we have seen accelerating results in terms of revenues, net sales and customer uptake of our new products," chief executive Tom Glocer said in a statement. "Based on these encouraging trends, we expect that Thomson Reuters will return to revenue growth in the third quarter."
The company reiterated its forecast that 2010 revenue would be flat to slightly down compared with 2009, and that net sales would strengthen this year.
While net sales improved, revenue was still down year-on-year due to the delayed impact of cancelled subscriptions.
In the markets division, which serves the financial industry, revenue fell four per cent from the same quarter a year earlier. Revenue from the division was up from the first quarter, excluding adjustments for currency, marking the second consecutive quarter of sequential growth.
Revenue rose two per cent in the professional division, which sells databases and other information reservoirs to lawyers, accountants, scientists and healthcare workers.
The Reuters news agency business reported a three per cent fall in revenue, but net sales turned positive after it won a contract with CNN.
● SOURCE Reuters | Thomson Reuters press release | Earnings call transcript
Expect revenue growth in 2nd half, Tom Glocer tells shareholders
Friday 14 May 2010
Thomson Reuters has weathered the economic storm and expects to return to revenue growth in the second half of this year, CEO Tom Glocer said on Friday.
He told shareholders at the group’s annual general meeting in Toronto that Thomson Reuters stood to gain from this year's new products, including software for the financial services industry, tax professionals and lawyers, as well as Reuters Insider, a new Web-based business news television service launched this week.
"While many companies had to slash their R&D budgets just to be able to survive the recession, we had the financial strength and determination to keep investing in product development," Glocer said. "...These investments are now beginning to bear fruit and it's very exciting. I strongly believe that the combination of improving market conditions that we see now, new flagship offerings and scalable infrastructure, positions our company very well to grow and deliver shareholder value in 2011 and beyond," he added.
In comments after the meeting Glocer said the company was still looking at acquisitions, although he did not predict any deals with more than a $1 billion price tag. “Our history has been to make a number of small to medium-size fold-in acquisitions, and that’ll be true this year as well ... There’s more in the pipeline,” Glocer said.
Shareholders voted in favour of a plan to freeze base salaries for Glocer and four other key executives this year, in a so-called “say on pay” resolution. Glocer’s $1.55 million base salary was a small fraction of his total 2009 compensation of $36.6 million, which included performance pay. The company said the results of the vote would be released next week. At last year’s AGM, 17.7 per cent voted against top executives' pay packages. About 53 per cent of the company's stock is owned by Canada’s Thomson family.
Asked about an ongoing labour dispute with 420 journalists in New York, Glocer said contract negotiations begun in October 2008 with The Newspaper Guild of New York had reached an impasse. The union has accused the company of trying to impose an illegal pay cut on its members. The company disputes this. Glocer said he was still hopeful the two sides could reach a negotiated settlement but added "we have to be tough on costs".
“We are in a very delicate place right now,” Glocer said in response to a question by Lise Lareau of the Canadian Media Guild. “ ... I’m comfortable that legally and ethically the company has acted properly.”
● SOURCE The Canadian Press | The Globe and Mail
He told shareholders at the group’s annual general meeting in Toronto that Thomson Reuters stood to gain from this year's new products, including software for the financial services industry, tax professionals and lawyers, as well as Reuters Insider, a new Web-based business news television service launched this week.
"While many companies had to slash their R&D budgets just to be able to survive the recession, we had the financial strength and determination to keep investing in product development," Glocer said. "...These investments are now beginning to bear fruit and it's very exciting. I strongly believe that the combination of improving market conditions that we see now, new flagship offerings and scalable infrastructure, positions our company very well to grow and deliver shareholder value in 2011 and beyond," he added.
In comments after the meeting Glocer said the company was still looking at acquisitions, although he did not predict any deals with more than a $1 billion price tag. “Our history has been to make a number of small to medium-size fold-in acquisitions, and that’ll be true this year as well ... There’s more in the pipeline,” Glocer said.
Shareholders voted in favour of a plan to freeze base salaries for Glocer and four other key executives this year, in a so-called “say on pay” resolution. Glocer’s $1.55 million base salary was a small fraction of his total 2009 compensation of $36.6 million, which included performance pay. The company said the results of the vote would be released next week. At last year’s AGM, 17.7 per cent voted against top executives' pay packages. About 53 per cent of the company's stock is owned by Canada’s Thomson family.
Asked about an ongoing labour dispute with 420 journalists in New York, Glocer said contract negotiations begun in October 2008 with The Newspaper Guild of New York had reached an impasse. The union has accused the company of trying to impose an illegal pay cut on its members. The company disputes this. Glocer said he was still hopeful the two sides could reach a negotiated settlement but added "we have to be tough on costs".
“We are in a very delicate place right now,” Glocer said in response to a question by Lise Lareau of the Canadian Media Guild. “ ... I’m comfortable that legally and ethically the company has acted properly.”
● SOURCE The Canadian Press | The Globe and Mail
Thomson Reuters Q1 net profit falls 31% to $555 million
Tuesday 04 May 2010
"The tentative recovery in our net sales that we began to see in the second half of 2009 has firmed and accelerated in the first quarter of 2010," chief executive Tom Glocer said in a statement.
First-quarter underlying profit was $555 million, down six per cent from $590 million last year. Adjusted earnings per share fell to 36 cents from 40 cents in the same quarter last year, but beat the average analyst forecast of 31 cents. Revenue from ongoing businesses was $3.14 billion. Analysts expected $3.11 billion. Foreign exchange rate movements excluded, revenue fell two per cent.
The company stuck to its February forecast, saying net sales would strengthen throughout 2010. It also repeated that this year's revenue would be flat to slightly down and that underlying free cash flow would be down slightly from 2009 as it invests in new products and platforms.
Thomson Reuters said it would spend more than $1 billion on new technology and products. Among them is Eikon, a new desktop for financial and trading clients.
MARKETS DIVISION
● Revenue was flat in the markets division, which includes the news service and data products for financial industry customers. Excluding the impact of foreign exchange rates, revenue fell four per cent. Markets revenue depends heavily on long-term subscriptions. The financial crisis, which crested in early 2009, triggered massive layoffs and cancellations of trading terminals. While the economy has improved, many of these cancellations have shown up in recent quarterly results.
PROFESSIONAL DIVISION
● Revenue rose two per cent in the professional division, which sells databases and other information reservoirs to lawyers, accountants, scientists and healthcare workers. Excluding the impact of foreign exchange rates, this revenue rose one per cent. Many law firms cut staff as they struggled in the recession, and cash-strapped clients sought lower legal bills. Legal revenue slipped three per cent before currency adjustments.
● SOURCE Reuters | Transcript of Thomson Reuters call with analysts
Thomson Reuters reveals long-term targets
Monday 19 April 2010
Thomson Reuters on Monday revealed long-term targets for mid-to-high single digit revenue growth rates, operating profit margins in the mid-20 per cent range, and free cash flow in excess of $3 billion.
"The severity and duration of the 'Great Recession' of 2009 has meant that it will take us a little longer to reach these goals, but they appear no less achievable to us," the company said in its latest annual report.
A joint message to shareholders from chairman David Thomson and chief executive Tom Glocer said that despite the most challenging economic conditions they had seen in their business careers the company delivered resilient operating and financial performance in 2009. "We would characterise our results as being excellent on a relative basis and acceptable, but far short of what we believe Thomson Reuters has the potential to achieve, on an absolute basis."
They said they were very proud that while they had worked hard to reduce costs and realise savings through the integration of the acquired Reuters businesses, they had been able to continue and, in fact, increase investment in strategic new product platforms and in the international expansion of the business. “We are well ahead of plan in the integration of Reuters, and by year-end 2009 we had achieved combined run-rate savings of $1.1 billion from our integration and legacy savings programs. We now expect to achieve some 2.5 times greater savings from the Reuters integration ($1.2 billion) than originally forecast."
The Reuters integration had also continued to outpace expectations in terms of bringing new content, technology and services to customers, combining the best elements of the cultures of the legacy organisations, and providing new opportunities for Thomson Reuters’ 55,000 employees.
This year, Thomson Reuters could continue and accelerate the process of taking its businesses global – especially to tap higher growth rates in rapidly developing economies, and add other market sectors where professionals need its special combination of must-have content and technology to do their jobs.
"In 2010, we are following both of these paths to restart growth in our businesses that have been hardest hit by the global recession and accelerate growth in our units that have continued to grow right through the crisis…
"Over the longer term, we believe that our business can achieve mid-to-high single digit revenue growth rates, operating profit margins in the mid-20% range, and free cash flow in excess of $3 billion. The severity and duration of the 'Great Recession' of 2009 has meant that it will take us a little longer to reach these goals, but they appear no less achievable to us."
The report is in a new multimedia format – an online mix of video, text, pictures and animated graphics. "Going digital has made us a much greener company," Glocer said in a video message. "No trees were chopped down in the making of this annual report, unless fossil fuel was consumed in delivering it to you."
Thomson Reuters shareholders annual general meeting is to be held in Toronto on 14 May.
● CLICK to view Thomson Reuters 2009 annual report
"The severity and duration of the 'Great Recession' of 2009 has meant that it will take us a little longer to reach these goals, but they appear no less achievable to us," the company said in its latest annual report.
A joint message to shareholders from chairman David Thomson and chief executive Tom Glocer said that despite the most challenging economic conditions they had seen in their business careers the company delivered resilient operating and financial performance in 2009. "We would characterise our results as being excellent on a relative basis and acceptable, but far short of what we believe Thomson Reuters has the potential to achieve, on an absolute basis."
They said they were very proud that while they had worked hard to reduce costs and realise savings through the integration of the acquired Reuters businesses, they had been able to continue and, in fact, increase investment in strategic new product platforms and in the international expansion of the business. “We are well ahead of plan in the integration of Reuters, and by year-end 2009 we had achieved combined run-rate savings of $1.1 billion from our integration and legacy savings programs. We now expect to achieve some 2.5 times greater savings from the Reuters integration ($1.2 billion) than originally forecast."
The Reuters integration had also continued to outpace expectations in terms of bringing new content, technology and services to customers, combining the best elements of the cultures of the legacy organisations, and providing new opportunities for Thomson Reuters’ 55,000 employees.
This year, Thomson Reuters could continue and accelerate the process of taking its businesses global – especially to tap higher growth rates in rapidly developing economies, and add other market sectors where professionals need its special combination of must-have content and technology to do their jobs.
"In 2010, we are following both of these paths to restart growth in our businesses that have been hardest hit by the global recession and accelerate growth in our units that have continued to grow right through the crisis…
"Over the longer term, we believe that our business can achieve mid-to-high single digit revenue growth rates, operating profit margins in the mid-20% range, and free cash flow in excess of $3 billion. The severity and duration of the 'Great Recession' of 2009 has meant that it will take us a little longer to reach these goals, but they appear no less achievable to us."
The report is in a new multimedia format – an online mix of video, text, pictures and animated graphics. "Going digital has made us a much greener company," Glocer said in a video message. "No trees were chopped down in the making of this annual report, unless fossil fuel was consumed in delivering it to you."
Thomson Reuters shareholders annual general meeting is to be held in Toronto on 14 May.
● CLICK to view Thomson Reuters 2009 annual report
Thomson Reuters files its 2009 annual report
Thursday 11 March 2010
The report is available on ● www.thomsonreuters.com in the Investor Relations section.
CLICK this link to download it directly ● Thomson Reuters 2009 Annual Report
Hard copies may be obtained, free of charge, by contacting Thomson Reuters Investor Relations at ● investor.relations@thomsonreuters.com or by phone at + 1.800.969.9974.
Thomson Reuters reported its 2009 results on 24 February. Profit for the last quarter was 68 per cent lower and financial customer losses were expected to continue to hurt revenue this year. The next quarterly results are due to be announced on 4 May.
● SOURCE Thomson Reuters
TRI downgraded to underweight from neutral
Thursday 25 February 2010
Thomson Reuters shares were downgraded to underweight from neutral on Thursday, a day after the company reported sharply lower 2009 Q4 profit and signalled revenue growth would not return until the second half of this year.
Investment bank Piper Jaffray issued the downgrade and cut its price target for the share to $31 from $33. Thomson Reuters closed on Wednesday at $34.51 on volume of 656,288 shares, above the average daily volume of 390,839. The stock is currently above its 50-day moving average of $33.25 and above its 200-day moving average of $32.04.
Piper’s analyst said: “Increased investment spending, higher integration costs associated with Reuters, and still anemic revenue trends will translate into lackluster earnings on a near-term basis. We see limited catalysts for the share over the next six months given the uninspiring earnings outlook and, accordingly, lower our rating to Underweight from Neutral. We still like Thomson Reuters’ franchise, management team, and long-term growth prognosis, but within our coverage universe we see more attractive opportunities elsewhere within the next six months.”
The website SmarTrend, reporting the downgrade, said it was bullish on Thomson Reuters. SmarTrend alerted its subscribers to watch for a reversal of this month’s 2.6 per cent increase in the value of the stock since an Uptrend alert on 1 February at $33.63.
● SOURCE SmarTrend | Street Insider
Investment bank Piper Jaffray issued the downgrade and cut its price target for the share to $31 from $33. Thomson Reuters closed on Wednesday at $34.51 on volume of 656,288 shares, above the average daily volume of 390,839. The stock is currently above its 50-day moving average of $33.25 and above its 200-day moving average of $32.04.
Piper’s analyst said: “Increased investment spending, higher integration costs associated with Reuters, and still anemic revenue trends will translate into lackluster earnings on a near-term basis. We see limited catalysts for the share over the next six months given the uninspiring earnings outlook and, accordingly, lower our rating to Underweight from Neutral. We still like Thomson Reuters’ franchise, management team, and long-term growth prognosis, but within our coverage universe we see more attractive opportunities elsewhere within the next six months.”
The website SmarTrend, reporting the downgrade, said it was bullish on Thomson Reuters. SmarTrend alerted its subscribers to watch for a reversal of this month’s 2.6 per cent increase in the value of the stock since an Uptrend alert on 1 February at $33.63.
● SOURCE SmarTrend | Street Insider
TR Q4 earnings down 68%, more revenue pain expected this year
Wednesday 24 February 2010
But the company also said on Wednesday net sales were positive from October to December, and it forecast a return to revenue growth in the second half of this year. The impact of net sales on revenue is delayed because of the company's subscription model.
"We've already seen the net sales picture improve significantly through the last quarter and into the first quarter of this year," chief executive Tom Glocer said in a Reuters interview.
The company earned $177 million in the three months from October to December, down from $560 million a year earlier. It forecast 2010 revenue to be flat or slightly lower, and underlying free cash flow to be slightly down from 2009 as it continues to invest in new products and platforms. Fourth quarter underlying profit fell 16 per cent to $661 million. Adjusted earnings per share slipped to 44 cents from 50 cents a year earlier, but this was a cent above the average Wall Street estimate.
For the year as a whole, revenue from ongoing businesses rose one per cent to $3.35 billion, slightly above the average analyst forecast of $3.32 billion. Excluding the impact of foreign exchange rates, revenue fell three per cent.
"I am pleased with the resilient performance of the company in 2009,” Glocer said in a prepared statement. “Despite the worst global operating environment any of us has faced, Thomson Reuters was able to hold or improve on our prior-year results, with revenues comparable to 2008 and underlying operating margin and free cash flow up on the prior year. I am also pleased that our net sales performance improved significantly through the year, with the fourth quarter recording positive net sales for the company as a whole."
Glocer said he was confident 2009 was the bottom of the sales cycle. "I expect that we will return to revenue growth in the second half of 2010," he said, and 2010 would be the final year of heavy integration spending in the markets division.
Annualised savings from the merger between Thomson and Reuters reached $1.1 billion last year, $300 million more than the company estimated when it closed the deal in April 2008. The company raised its 2011 annualised savings target by $200 million to $1.6 billion. It said $1.2 billion of that would come from the savings of integrating the company, and the rest from older savings programmes.
The board approved a four cents increase in the annual dividend to $1.16 per share.
Thomson Reuters’ US shares have risen about nine per cent so far this year, closing at $35.06 on the New York Stock Exchange on Tuesday. After today’s results announcement the shares lost nearly four per cent of their value before closing down 1.57 per cent in New York and 1.83 per cent in Toronto.
● SOURCE Reuters | PR Newswire | Washington Post/The Associated Press
Tom Glocer says he's seen 'marked uptick' in sales, TR well placed for acquisitions
Wednesday 27 January 2010
Tom Glocer said on Wednesday Thomson Reuters saw a marked uptick in sales as it progressed through the end of 2009.
The CEO told Reuters Insider television that because of the company's subscription model it would take time for the weakness earlier in the year to work through the system but that it was now well placed.
Thomson Reuters was in a strong position to make acquisitions and to invest in its businesses and had opportunistically refinanced debt over the summer, he said. There was "a tonne" of good businesses coming onto the market.
Glocer is attending the World Economic Forum in Davos. He said that at the WEF a year ago it was "near professional suicide" when he had expressed some optimism but now in the technology world in particular, businesses were cautiously beginning to invest.
● SOURCE Reuters
● Tom Glocer | VIDEO
The CEO told Reuters Insider television that because of the company's subscription model it would take time for the weakness earlier in the year to work through the system but that it was now well placed.
Thomson Reuters was in a strong position to make acquisitions and to invest in its businesses and had opportunistically refinanced debt over the summer, he said. There was "a tonne" of good businesses coming onto the market.
Glocer is attending the World Economic Forum in Davos. He said that at the WEF a year ago it was "near professional suicide" when he had expressed some optimism but now in the technology world in particular, businesses were cautiously beginning to invest.
● Tom Glocer | VIDEO
Avoidance of debt said key to success of Thomson Reuters deal
Tuesday 29 December 2009
Thomson’s takeover of Reuters fared better than other media deals that have since turned sour because the Canadian group avoided taking on vast debts, says Geoffrey Beattie, the combined group’s deputy chairman.
Beattie, who is also president of the Thomson family’s investment company Woodbridge – 55 per cent shareholder in Thomson Reuters – said that by using “super profits” from selling college textbooks arm Thomson Learning to private equity buyers, “we went in completely financially hedged”.
Thomson worked on tax planning for the cash and stock deal for two years, Beattie told the Financial Times. Since then, “in the darkest days of last year”, Woodbridge has bought back C$500 million of stock at depressed valuations.
Thomson Reuters has been one of media’s most resilient performers, and avoided the shocks delivered by peers such as Reed Elsevier, the FT said.
Canada’s richest family shocked their industry by selling The Times and The Sunday Times to Rupert Murdoch in 1981, but after the crisis of the past two years the unsentimental decision to trade out of print media for better long-term opportunities looks like part of a pattern, the FT said.
“Having pocketed $7.75bn, $2bn more than outsiders had expected, Thomson revealed a £7.9bn offer for Reuters, in the same month as Mr Murdoch’s News Corp doubled up on newspapers with a $5.6bn bid for Dow Jones. The deal transformed its Thomson Financial division into a market data leader on a par with Bloomberg and diversified a portfolio focused on professional information systems for lawyers, scientists and accountants.”
Thomson Reuters has not been immune, however. The former Thomson Corp share price, which topped C$50 in early 2007, now stands below $34.
Beattie describes the difference between the family’s fortunes and those of others as the difference between building and trading. Whether or not a controlling shareholder represents a family, “when you have big illiquid positions, you have to be much more focused on risk management and longer-term market cycles”.
The typical institutional shareholder may hold a stock for less than six months, but families cannot trade in and out of their investments, he notes. The advantage is they avoid trading costs, think more carefully about the merits and proper risk-return ratio of their assets, and know that “from time to time there will be opportunities where the market gets ahead of itself”.
“We know there are always bumps in the road but long-term investors win over short-term investors. It’s a kind of religion [with the family]”, adds Roger Martin, a Thomson Reuters director and dean of Toronto university’s Rotman management school.
He notes that there is a difference between family investors such as Woodbridge, whose economic stake matches their voting control, and those who use super-voting rights to magnify their power over their groups. “There’s a nice moral authority point there. It’s not just a management that doesn’t own any shares in the company saying, ‘Don’t worry about the share price, we’re doing everything we can.’”
● SOURCE Financial Times
Beattie, who is also president of the Thomson family’s investment company Woodbridge – 55 per cent shareholder in Thomson Reuters – said that by using “super profits” from selling college textbooks arm Thomson Learning to private equity buyers, “we went in completely financially hedged”.
Thomson worked on tax planning for the cash and stock deal for two years, Beattie told the Financial Times. Since then, “in the darkest days of last year”, Woodbridge has bought back C$500 million of stock at depressed valuations.
Thomson Reuters has been one of media’s most resilient performers, and avoided the shocks delivered by peers such as Reed Elsevier, the FT said.
Canada’s richest family shocked their industry by selling The Times and The Sunday Times to Rupert Murdoch in 1981, but after the crisis of the past two years the unsentimental decision to trade out of print media for better long-term opportunities looks like part of a pattern, the FT said.
“Having pocketed $7.75bn, $2bn more than outsiders had expected, Thomson revealed a £7.9bn offer for Reuters, in the same month as Mr Murdoch’s News Corp doubled up on newspapers with a $5.6bn bid for Dow Jones. The deal transformed its Thomson Financial division into a market data leader on a par with Bloomberg and diversified a portfolio focused on professional information systems for lawyers, scientists and accountants.”
Thomson Reuters has not been immune, however. The former Thomson Corp share price, which topped C$50 in early 2007, now stands below $34.
Beattie describes the difference between the family’s fortunes and those of others as the difference between building and trading. Whether or not a controlling shareholder represents a family, “when you have big illiquid positions, you have to be much more focused on risk management and longer-term market cycles”.
The typical institutional shareholder may hold a stock for less than six months, but families cannot trade in and out of their investments, he notes. The advantage is they avoid trading costs, think more carefully about the merits and proper risk-return ratio of their assets, and know that “from time to time there will be opportunities where the market gets ahead of itself”.
“We know there are always bumps in the road but long-term investors win over short-term investors. It’s a kind of religion [with the family]”, adds Roger Martin, a Thomson Reuters director and dean of Toronto university’s Rotman management school.
He notes that there is a difference between family investors such as Woodbridge, whose economic stake matches their voting control, and those who use super-voting rights to magnify their power over their groups. “There’s a nice moral authority point there. It’s not just a management that doesn’t own any shares in the company saying, ‘Don’t worry about the share price, we’re doing everything we can.’”
● SOURCE Financial Times
Tom Glocer upbeat at close of 'a particularly memorable year'
Tuesday 22 December 2009
“This has been a year of unprecedented challenge and equally unprecedented achievement for Thomson Reuters,” the chief executive told the group’s 50,000 staff on Tuesday.
“Over the past 15 months, the world came frighteningly close to economic collapse. But even though all signs in the global economy and in our business suggest the worst is behind us, nobody knows for sure what shape the economic recovery will take.
“To cope with this economic uncertainty, we are building on our company's strong 2009 performance by continuing to invest in the key projects that will help us restart growth and deliver long-term value to our stakeholders. I feel renewed confidence in our ability to do this. I have just returned from visiting many of our offices and customers in China, the UAE, India and Japan, and at each stop I found new growth opportunities and met with employees whose talent and passion for the business convinced me that we will capture those opportunities. Even in areas where growth has slowed or stopped for the moment, we have opportunities to take share and the people who can make it happen.
“I’ll have more to say on this as the new year begins. But now, as we reach the end of a particularly memorable year, I just want to take a moment to say thanks. Your dedication, hard work and skill drove great progress on our 2009 priorities.”
Glocer listed these as
● “Integration – thanks to an amazing performance in Markets, we're running ahead of target and schedule on the Reuters integration program
● “Globalization – we've taken bold steps to expand our position in the world's fastest growing markets such as building out our Westlaw business internationally and expanding our Scientific markets
● “Whole greater than the sum of its parts – there have been many successes here including the growing impact of the Thomson Reuters brand, which entered the top 40 of the world's most valuable brands this year, and the development of best-in-class product platforms such as Cobalt, Utah and the Global Tax Workstation.
“You accomplished all this in the face of the toughest economic conditions any of us have ever experienced.
Year's end is also an appropriate time to reflect on all that you have done to benefit our communities. As I see it, being a world-class company isn't just about hitting our numbers, important though that is. It's also about the values we uphold and what we stand for in the wider world. On that front, I feel incredibly fortunate to work for this company.”
● SOURCE Reuters
Thomson Reuters limits 2010 price increases
Friday 18 December 2009
Thomson Reuters will increase the price of most of its data products by three per cent instead of 4.75 per cent in 2010, reflecting tighter budgets for market data, a senior company executive said.
“An annual Thomson Reuters price adjustment is part of our standard operating procedure and is well understood and anticipated by our customers,” said Simon Lee, global head of commercial operations.
Thomson Reuters raised its prices by 4.75 per cent in 2009. The former Thomson and Reuters groups separately hiked their prices by four per cent in 2008.
The three per cent increase for 2010 will be imposed on all datafeeds related to market data, such as Reuters 3000Xtra, Thomson One Investment Management, Thomson One.com Investment Banking and Thomson ONE Wealth Management. Reuters Dealing, the foreign exchange trade platform, will not be increased because it was already “appropriately priced”, Lee said.
The decision to minimise any price increases for datafeed products was communicated to customers in October and did not reflect any concerns about competition, Lee said.
● SOURCE Securities Industry News
“An annual Thomson Reuters price adjustment is part of our standard operating procedure and is well understood and anticipated by our customers,” said Simon Lee, global head of commercial operations.
Thomson Reuters raised its prices by 4.75 per cent in 2009. The former Thomson and Reuters groups separately hiked their prices by four per cent in 2008.
The three per cent increase for 2010 will be imposed on all datafeeds related to market data, such as Reuters 3000Xtra, Thomson One Investment Management, Thomson One.com Investment Banking and Thomson ONE Wealth Management. Reuters Dealing, the foreign exchange trade platform, will not be increased because it was already “appropriately priced”, Lee said.
The decision to minimise any price increases for datafeed products was communicated to customers in October and did not reflect any concerns about competition, Lee said.
● SOURCE Securities Industry News
Thomson Reuters completes acquisition of Breakingviews
Tuesday 01 December 2009
Thomson Reuters said on Tuesday it had completed its acquisition of Breakingviews, a leading provider of online financial insight, positioning the newly combined commentary organisation as the global leader in point-of-view journalism for financial markets.
The output of the combined team of Reuters’ original commentary writers and the Breakingviews people will be known as Reuters Breakingviews to make a clear distinction between the news service and commentary offerings.
"A fundamental plank of our Editorial strategy for making Reuters the indispensable news service for the 21st century is to expand our traditional fact-based news coverage to also offer agenda-setting point-of-view journalism. I am confident we will build upon reputation and expertise from both Reuters and Breakingviews and leverage the expertise of the combined organization," said David Schlesinger, editor-in-chief.
The Reuters Breakingviews attribution will designate the commentary and opinion of the named authors, while Reuters will designate the expert sourced news and analysis that has moved markets and provided insight for more than 150 years.
Reuters Breakingviews has about 30 columnists based in London, New York, Hong Kong, Paris, Washington, Moscow and Madrid, with immediate plans for expanded coverage in the Gulf, Japan, Germany and India.
The newly combined service is available on all Thomson Reuters desktops with selected commentaries appearing on reuters.com. Reuters Breakingviews also reaches a broader audience of nearly 4.5 million investors and opinion formers via daily columns in many of the world's most influential newspapers, including The New York Times, Le Monde, The Daily Telegraph and the International Herald Tribune.
Hugo Dixon, editor, Reuters Breakingviews, who will be running the combined commentary team, said: "The enlarged team will have global reach, allowing us to react more rapidly to breaking news and cover more stories. We will also now be able to reach hundreds of thousands more influential readers through Thomson Reuters desktops."
Breakingviews was founded in 1999 to provide online financial commentary aimed at a professional audience. It is one of a handful of journalism websites to have successfully introduced a subscription model. The company also has a thriving syndication business.
● SOURCE Marketwire
The output of the combined team of Reuters’ original commentary writers and the Breakingviews people will be known as Reuters Breakingviews to make a clear distinction between the news service and commentary offerings.
"A fundamental plank of our Editorial strategy for making Reuters the indispensable news service for the 21st century is to expand our traditional fact-based news coverage to also offer agenda-setting point-of-view journalism. I am confident we will build upon reputation and expertise from both Reuters and Breakingviews and leverage the expertise of the combined organization," said David Schlesinger, editor-in-chief.
The Reuters Breakingviews attribution will designate the commentary and opinion of the named authors, while Reuters will designate the expert sourced news and analysis that has moved markets and provided insight for more than 150 years.
Reuters Breakingviews has about 30 columnists based in London, New York, Hong Kong, Paris, Washington, Moscow and Madrid, with immediate plans for expanded coverage in the Gulf, Japan, Germany and India.
The newly combined service is available on all Thomson Reuters desktops with selected commentaries appearing on reuters.com. Reuters Breakingviews also reaches a broader audience of nearly 4.5 million investors and opinion formers via daily columns in many of the world's most influential newspapers, including The New York Times, Le Monde, The Daily Telegraph and the International Herald Tribune.
Hugo Dixon, editor, Reuters Breakingviews, who will be running the combined commentary team, said: "The enlarged team will have global reach, allowing us to react more rapidly to breaking news and cover more stories. We will also now be able to reach hundreds of thousands more influential readers through Thomson Reuters desktops."
Breakingviews was founded in 1999 to provide online financial commentary aimed at a professional audience. It is one of a handful of journalism websites to have successfully introduced a subscription model. The company also has a thriving syndication business.
● SOURCE Marketwire
Thomson family, Canada's richest, increases wealth despite recession
Thursday 19 November 2009
“In compiling our 11th annual Rich 100 list, we were surprised to discover that at the tail-end of the recession the majority of Canada's richest had not just stopped bleeding money - they were making it again. A lot of it,” the magazine said.
From April to September, the Toronto Stock Exchange composite index rose by nearly 45 per cent – a rise further bolstered by the strength of the Canadian dollar. That translated into a C$7.6 billion rise in the net worth of Canada’s 100 richest people. Almost half of that gain – just over C$3.5 billion – went to Canada’s richest family by far, the Thomsons headed by the 3rd Baron Thomson of Fleet, pictured.
“The family of the late Kenneth Thomson was worth roughly $21.99 billion as of late September, when we finalized our calculations for this year," Canadian Business said. "That’s an impressive 19% jump from last year, when the sagging fortunes of the media industry had hammered the value of the family’s central asset: more than 455 million shares in Thomson Reuters Corp. But that really fails to capture the awe-inspiring windfall that the rebound bestowed upon Canada’s richest clan. Consider this: that $3.5-billion gain from 2008 to 2009 translates into $10.9 million per day, $452,500 per hour, $7,540 per minute and $126 per second. But even at that, the Thomsons are still well below their record high of $25.35 billion, reached in 2007.”
Thomson Reuters shares have fallen by C$1.99 in the past couple of months, carving C$907 million off the family fortune, the magazine said.
“But the Thomsons won’t need to worry about selling assets to pay the bills any time soon. It’s been three years since Ken, the kindly family patriarch who was frequently seen walking his dog around Toronto’s posh Rosedale neighbourhood, passed away. His son, David, is now head of the family’s collection of businesses, and serves as chairman of Thomson Reuters.
“Like his father, David shuns the spotlight and rarely speaks publicly. That’s also true of the other siblings, Peter - who is also active in the family businesses and sits on the board of Thomson Reuters - and sister Taylor, who has worked as an actress and producer, but plays little role in the family business.”
● SOURCE Canadian Business
Thomson Reuters almost back to pre-Lehman bankruptcy levels - Tom Glocer
Monday 16 November 2009
Thomson Reuters has been hurt by the demise of several Wall Steet firms but was able to pick up business from acquirers such as Barclays and Nomura and is almost back to pre-Lehman Brothers bankruptcy levels, Tom Glocer said on Monday.
"We've gotten the business back much faster than I expected," the chief executive said on the sidelines of the WSJ CEO Council in New York.
The financial business, however, continues to be slow. He pointed to health care, science and tax and accounting services as a growth area.
Glocer said the United States should see a slow climb back to employment but some jobs aren't coming back because they have been eliminated, or sent overseas, or replaced by technology.
Thomson Reuters has continued to selectively hire and continues to do so, he said. The company did not make any major job cuts and does not foresee any. Instead, he said it has slowed the pace of hiring to contain operating costs.
● SOURCE The Wall Street Journal / Dow Jones Newswires
"We've gotten the business back much faster than I expected," the chief executive said on the sidelines of the WSJ CEO Council in New York.
The financial business, however, continues to be slow. He pointed to health care, science and tax and accounting services as a growth area.
Glocer said the United States should see a slow climb back to employment but some jobs aren't coming back because they have been eliminated, or sent overseas, or replaced by technology.
Thomson Reuters has continued to selectively hire and continues to do so, he said. The company did not make any major job cuts and does not foresee any. Instead, he said it has slowed the pace of hiring to contain operating costs.
● SOURCE The Wall Street Journal / Dow Jones Newswires
Thomson Reuters Q3 profit tumbles in 'challenging environment'
Thursday 05 November 2009
The group earned $162 million, or 19 cents per share, in the three months ended 30 September – down from $404 million or 49 cents per share a year earlier. Underlying operating profit rose three per cent to $711 million in the third quarter, from $690 million a year ago.
CEO Tom Glocer told investment analysts it was a challenging environment.
"Despite difficult market conditions, our businesses delivered solid results in the third quarter," he said. "Our Tax & Accounting and Healthcare & Science businesses continued to perform very strongly, and sales of subscription products in our Markets and Legal units improved in Q3 over what we expect were their bottom in Q2. While the weak year-to-date net sales experienced in recent quarters are now flowing through into revenues, we expect this dip to be shallow and limited to the next few quarters.
"Our ongoing focus on the Reuters integration and close cost management across the company has enabled us to continue to grow underlying operating profit. While we would welcome a quick return to revenue growth, we understand how to operate in challenging markets and we are confident that we are outperforming the competition," Glocer said.
Adjusted earnings from continuing operations slipped to 43 cents per share from 47 cents a year ago, beating average analyst forecasts of 40 cents per share.
Thomson Reuters said its revenue slipped four per cent to $3.22 billion, partly because of unfavourable foreign exchange rates.
"While the weak year-to-date net sales experienced in recent quarters are now flowing through into revenues, we expect this dip to be shallow and limited to the next few quarters," Glocer said.
Revenue from ongoing businesses, excluding the impact of foreign exchange rates, fell two per cent to $3.21 billion. The average analyst forecast was $3.23 billion.
In the markets division, revenue from the media operation including Reuters news agency fell by 14 per cent to $90 million amid consolidation among traditional media outlets such as newspapers.
Overall corporate expenses tripled from a year earlier to $163 million in the third quarter, due in part to integration costs.
Thomson Reuters re-affirmed its previous guidance: it expects revenue to grow this year and underlying operating profit margin and free cash flow to be comparable to 2008.
● SOURCE Reuters | Financial Post
Important lessons learned from financial turmoil - David Schlesinger
Friday 09 October 2009
“One lesson was that our standards needed to be constantly examined and sometimes strengthened. Another is that transparency is rewarded by trust.”
The media industry was in its own crisis at the same time as it was reporting on the financial downturn, Schlesinger said in a speech.
“Our sources and our readers were in crisis, too, and this meant that our stories were watched extremely carefully and people were quick to complain about anything they didn’t like.
“I am proud that most of our reporting was excellent, but those times when we didn’t get it right it was vital to correct our errors swiftly and publicly.
“Maintaining our trust with our audience is fundamental to our mission as a news service. Reporting truthfully, reporting accurately, correcting errors, obeying our standards are all vital and can’t be compromised, especially not in the heat of a major and complex story.”
This year Reuters put its entire 500+ page ● Handbook of Journalism free online for anyone and everyone to read and comment on.
“We welcome that scrutiny from around the world. Where our standards are good and we live up to them, we want the attendant praise. Where we need to improve, or where we fail to live up to our ideals, we want the criticism. That should be the attitude that we in the media should strive for.”
Schlesinger was speaking at the Great Hall of the People in Beijing on transparency and the role of media in China. The occasion was a World Media Summit hosted by Chinese news agency Xinhua.
The increasing internationalisation of financial markets has at least two dimensions relevant to financial information in China, he said. First, Chinese markets participants and investors need to be efficiently informed about foreign markets, while second, their non-Chinese counterparts overseas need to be efficiently informed about China. Mutual benefit and success depend upon this reciprocal relationship.
“I believe journalism at its best is a mirror, exposing back to society a true and brutally honest picture of what is going on,” Schlesinger said.
“When we fail at that, when our picture is not clear or at all distorted, we deserve to be criticised. We must strive to be that perfect mirror. But for societies and economies to truly work, to be effective and to be healthy, they need to look into that mirror unflinchingly and honestly.
“That is where the virtue of transparency comes in. That is why companies and government departments and government officials need to be ready to be open. That is why they need to take interviews and to reveal figures. That is why the instinct for secrecy needs to be resisted. That is why all involved need to help the media help society, by accepting that while openness, transparency and accountability may lead to momentary discomfort and sometimes embarrassment, they are ultimately worthwhile and, in fact, are a precondition to a truly healthy, stable and successful system.
“Similarly, a commitment to these practices is also a precondition for China’s development of healthy, sound and internationally competitive financial markets that protect domestic investors and encourage foreign investors to place their capital.”
Schlesinger, a former bureau chief in Beijing (1991-1994), added: “As Chinese financial journalism professionalises further, I look forward to mutually beneficial competition. I also look forward to Chinese nationals having full careers within foreign media organisations in China. My fervent wish is that one day soon Reuters financial news editor in China will be a Chinese national – one step on that person’s path to be global editor-in-chief!”
● SOURCE Reuters
● Reuters Handbook of Journalism
Thomson Reuters in $600 million debt refinancing
Tuesday 22 September 2009
Thomson Reuters said it will buy back debt securities with $600 million total face value and fund the redemption by issuing new debt securities or from cash on hand.
After the close of markets, the group said it would offer $500 million in new notes that will pay 4.7 per cent and be due in 2019 to help pay for the refinancing. The offering is expected to close on 29 September.
It is redeeming all 6.85 per cent medium-term notes that expire on 1 June 2011, all 4.75 per cent notes maturing on 28 May 2010 and all of its 7.74 per cent notes due on 22 December 2010.
The three issues have C$400 million, US$250 million and US$75 million of principal outstanding, respectively.
The group said it will pay the applicable early repayment premiums as well as accrued and unpaid interest through the redemption dates.
Thomson Reuters shares closed 2.27 per cent higher at $34.30 in New York and 1.58 per cent higher at C$36.72 in Toronto.
● SOURCE Thomson Reuters
After the close of markets, the group said it would offer $500 million in new notes that will pay 4.7 per cent and be due in 2019 to help pay for the refinancing. The offering is expected to close on 29 September.
It is redeeming all 6.85 per cent medium-term notes that expire on 1 June 2011, all 4.75 per cent notes maturing on 28 May 2010 and all of its 7.74 per cent notes due on 22 December 2010.
The three issues have C$400 million, US$250 million and US$75 million of principal outstanding, respectively.
The group said it will pay the applicable early repayment premiums as well as accrued and unpaid interest through the redemption dates.
Thomson Reuters shares closed 2.27 per cent higher at $34.30 in New York and 1.58 per cent higher at C$36.72 in Toronto.
● SOURCE Thomson Reuters
Broker cuts Thomson Reuters rating
Friday 07 August 2009
Broker Jefferies International cut its rating on Thomson Reuters to “underperform” from “hold”, saying that while Thursday's second quarter results were excellent they likely represented the peak of cost savings.
The broker also noted that a decline in subscriptions in the Markets division would likely trickle through later this year.
The Q2 results were better than expected and the company affirmed its 2009 outlook that revenue will grow despite tough conditions in the financial industry.
Profit growth was attributed to cost controls, currency benefits and savings from Thomson's purchase of Reuters last year.
CEO Tom Glocer said the fallout from the financial crisis will likely squeeze the Markets division in the second half of the year.
● SOURCE MarketWatch
The broker also noted that a decline in subscriptions in the Markets division would likely trickle through later this year.
The Q2 results were better than expected and the company affirmed its 2009 outlook that revenue will grow despite tough conditions in the financial industry.
Profit growth was attributed to cost controls, currency benefits and savings from Thomson's purchase of Reuters last year.
CEO Tom Glocer said the fallout from the financial crisis will likely squeeze the Markets division in the second half of the year.
● SOURCE MarketWatch
Cost cuts help Q2 results beat forecasts
Thursday 06 August 2009
Thomson Reuters reported a better-than-expected quarterly profit on Thursday, helped by cost cuts, and affirmed its 2009 outlook that revenue will grow despite tough conditions in the financial industry.
Q2 underlying operating profit rose 11 per cent to $793 million, or 58 cents per share, from $713 million, or 39 cents per share, in the same quarter a year ago. Analysts had expected earnings of 43 cents per share on that basis, according to Reuters Estimates.
The company attributed the profit growth to cost controls, currency benefits and savings from Thomson's purchase of Reuters last year. It expects $1 billion of annual savings by the end of 2009. The target is $1.4 billion by 2011.
Revenue from ongoing businesses, excluding the impact of foreign exchange rates, rose two per cent to $3.28 billion.
The company stuck to its forecast that revenue would grow this year and that underlying operating margin and free cash flow would be comparable to 2008, even as customers cut staff and budgets in the wake of the financial crisis.
"Quite a few banks are saying, 'Oh, we cut too deeply and we're finding business is so good, we need to hire people to handle the volume,'" CEO Tom Glocer said in a Reuters interview. "I couldn't imagine six months ago that people would be talking about guaranteed bonuses over multiple years to hire people," he said.
Nevertheless, the fallout from the financial crisis will likely squeeze the Markets division, Glocer said. "It's only logical to assume that in the second half of the year, the (division's) reported revenue growth will go below the zero line rather than above it."
Thomson Reuters shares on the London Stock Exchange traded 6.44 per cent higher at 2000 pence after the release of the results, smashing through the previous 52-week high.
Shareholders will vote at extraordinary general meetings in London and Toronto on Friday on a proposal to delist the company's shares in London. They will continue to trade in New York and Toronto.
● SOURCE Reuters | Transcript of analysts’ conference call
Q2 underlying operating profit rose 11 per cent to $793 million, or 58 cents per share, from $713 million, or 39 cents per share, in the same quarter a year ago. Analysts had expected earnings of 43 cents per share on that basis, according to Reuters Estimates.
The company attributed the profit growth to cost controls, currency benefits and savings from Thomson's purchase of Reuters last year. It expects $1 billion of annual savings by the end of 2009. The target is $1.4 billion by 2011.
Revenue from ongoing businesses, excluding the impact of foreign exchange rates, rose two per cent to $3.28 billion.
The company stuck to its forecast that revenue would grow this year and that underlying operating margin and free cash flow would be comparable to 2008, even as customers cut staff and budgets in the wake of the financial crisis.
"Quite a few banks are saying, 'Oh, we cut too deeply and we're finding business is so good, we need to hire people to handle the volume,'" CEO Tom Glocer said in a Reuters interview. "I couldn't imagine six months ago that people would be talking about guaranteed bonuses over multiple years to hire people," he said.
Nevertheless, the fallout from the financial crisis will likely squeeze the Markets division, Glocer said. "It's only logical to assume that in the second half of the year, the (division's) reported revenue growth will go below the zero line rather than above it."
Thomson Reuters shares on the London Stock Exchange traded 6.44 per cent higher at 2000 pence after the release of the results, smashing through the previous 52-week high.
Shareholders will vote at extraordinary general meetings in London and Toronto on Friday on a proposal to delist the company's shares in London. They will continue to trade in New York and Toronto.
● SOURCE Reuters | Transcript of analysts’ conference call
Analysts' expectations of Q2 results
Wednesday 05 August 2009
Thomson Reuters reports its Q2 results on Thursday, but analysts are already weighing in on what they expect. The market consensus is C$3.3 billion in revenue and C$.43 earnings per share.
● Drew McReynolds, RBC Capital Markets analyst, has pegged revenue for the quarter at C$3.28 billion with cash EPS of C$.44. He expects a less severe trough in organic revenue growth in markets in the first half of 2010 of -6.9 per cent from -8.5 per cent and further improvement in financial sector sentiment, keeping a “outperform” rating on the company by raising the price target to $37 from $34.
● Phillip Huang, UBS analyst, says the key focus should be on the Markets division, which is "late cycle" and should move into negative territory after flat growth in the first quarter. "Thomson Reuters has rallied due to the consolidation," he said in a note to clients. "However, we believe organic revenue growth for Thomson Reuters is later cycle than the market expects." He expects an EPS at 40 cents and maintains a “sell” rating on the company, with a price target of $23.50.
● Paul Steep, analyst with Scotia Capital, is far more bullish despite believing the second quarter of 2009 could be the company's "most challenging quarter since the credit crisis began" as IT budgets have been frozen in the first half of the year. "Our estimates remain significantly ahead of consensus, reflecting the significant upside of integration synergies in 2011 and beyond," he said in a note. "We continue to expect the firm to build on the quick integration wins delivered in 2008." He also forecasts revenues of C$3.2 billion and EPS of C$.44, but has a target price of C$47 on a “sector outperform” rating.
● SOURCE Seeking Alpha
● Drew McReynolds, RBC Capital Markets analyst, has pegged revenue for the quarter at C$3.28 billion with cash EPS of C$.44. He expects a less severe trough in organic revenue growth in markets in the first half of 2010 of -6.9 per cent from -8.5 per cent and further improvement in financial sector sentiment, keeping a “outperform” rating on the company by raising the price target to $37 from $34.
● Phillip Huang, UBS analyst, says the key focus should be on the Markets division, which is "late cycle" and should move into negative territory after flat growth in the first quarter. "Thomson Reuters has rallied due to the consolidation," he said in a note to clients. "However, we believe organic revenue growth for Thomson Reuters is later cycle than the market expects." He expects an EPS at 40 cents and maintains a “sell” rating on the company, with a price target of $23.50.
● Paul Steep, analyst with Scotia Capital, is far more bullish despite believing the second quarter of 2009 could be the company's "most challenging quarter since the credit crisis began" as IT budgets have been frozen in the first half of the year. "Our estimates remain significantly ahead of consensus, reflecting the significant upside of integration synergies in 2011 and beyond," he said in a note. "We continue to expect the firm to build on the quick integration wins delivered in 2008." He also forecasts revenues of C$3.2 billion and EPS of C$.44, but has a target price of C$47 on a “sector outperform” rating.
● SOURCE Seeking Alpha
Tom Glocer gets "substantially more" than others - report
Monday 20 July 2009
Tom Glocer, Thomson Reuters’ CEO, was named on Monday as a board director who enjoys substantially more than others “despite tumbling stockmarkets, shrinking earnings and one of the most severe recessions in living memory”.
Glocer enjoyed an annual bonus payout of $3.03 million, or 212 per cent of his basic salary, for 2008. “The payout for the American lawyer, who sold London-based Reuters to Canadian rival Thomson in April last year, comes on top of a $757,397 payment to cover the personal cost of relocating from London to New York and a £27m takeover windfall,” The Guardian said.
Reporting a survey of management pay by Income Data Services (IDS), part of Thomson Reuters, it said UK directors' annual bonuses, when expressed as a proportion of basic salaries, have fallen by a quarter in the 12 months to April, down from 40 per cent of basic to 30 per cent. Over the same period, the FTSE 100 fell 38 per cent.
The survey does not take into account that in some cases board directors are successfully negotiating an increase in their basic salaries, mitigating the net impact on their take-home pay of falling performance bonuses, The Guardian said.
Revised deals are being secured despite unprecedented shareholder efforts to curb what they see as unacceptable revisions to boardroom pay deals.
Managers immediately below board level saw the steepest decline in their bonus, according to the IDS survey. This group had enjoyed bonus awards for the year to April 2008 worth 20 per cent of their basic salary; that has fallen to 13 per cent.
Meanwhile, middle and junior management saw their bonuses pared back from 10 per cent of basic salary to 7.8 per cent on average. Technical and professional staff experienced a lesser reduction in bonus, dropping from 8 per cent to 5.5 per cent.
● SOURCE The Guardian
Glocer enjoyed an annual bonus payout of $3.03 million, or 212 per cent of his basic salary, for 2008. “The payout for the American lawyer, who sold London-based Reuters to Canadian rival Thomson in April last year, comes on top of a $757,397 payment to cover the personal cost of relocating from London to New York and a £27m takeover windfall,” The Guardian said.
Reporting a survey of management pay by Income Data Services (IDS), part of Thomson Reuters, it said UK directors' annual bonuses, when expressed as a proportion of basic salaries, have fallen by a quarter in the 12 months to April, down from 40 per cent of basic to 30 per cent. Over the same period, the FTSE 100 fell 38 per cent.
The survey does not take into account that in some cases board directors are successfully negotiating an increase in their basic salaries, mitigating the net impact on their take-home pay of falling performance bonuses, The Guardian said.
Revised deals are being secured despite unprecedented shareholder efforts to curb what they see as unacceptable revisions to boardroom pay deals.
Managers immediately below board level saw the steepest decline in their bonus, according to the IDS survey. This group had enjoyed bonus awards for the year to April 2008 worth 20 per cent of their basic salary; that has fallen to 13 per cent.
Meanwhile, middle and junior management saw their bonuses pared back from 10 per cent of basic salary to 7.8 per cent on average. Technical and professional staff experienced a lesser reduction in bonus, dropping from 8 per cent to 5.5 per cent.
● SOURCE The Guardian
Delisting disappoints UK investors and analysts
Tuesday 23 June 2009
UK investors and analysts are disappointed at Thomson Reuters' plan to cancel its London Stock Exchange listing, Reuters reported.
Monday’s board decision prompted a jump in the shares on Tuesday, but the rally was tempered by fears some large British shareholders will have to cut or sell their stakes.
Chief executive Tom Glocer said he hoped UK shareholders – only five per cent of the company's combined shareholder base – would retain their investments after the reorganisation, but major institutional investors are likely to sell many or all of their shares, given the funds they manage are UK focused.
Reuters reported: "Tom Glocer was good enough to come and see me yesterday afternoon together with the two other remaining institutional shareholders in London, and I am bitterly disappointed," said one top-10 institutional investor who wished to remain anonymous.
The fund manager said he had hoped the company would leave it five years before reaching a decision on its listings.
"The dozy old UK institutions and sell-side analysts are only just realising that Thomson Reuters is a much better company than they thought," he said. "I think investors would have really come back to this one ... It's a real shame."
The company said the fragmentation in its share structure was deterring some investors.
Analysts at Numis Securities said they could see the benefits the simpler shareholder structure would bring but that they too were disappointed by the move.
"We have been firm supporters of the group, which was one of our key picks in Media 2009, and are therefore greatly saddened to see the delisting," they wrote, adding that many UK institutional investors would likely have to sell their stakes.
Numis had a “hold” rating on the London-listed stock prior to news of the reorganisation but upgraded it to “add” in order to reflect the discount relative to the US shares.
UBS analysts said any upside to the shares may be capped by the fact some institutional shareholders would have to sell stock and were less enthusiastic about the company's prospects, retaining a "sell" rating.
"We continue to believe the the fundamental value of the group overall remains too high," UBS analyst Phillip Huang said in a note. "We would expect to see evidence of deteriorating momentum near future, which combined with imminent increased liquidity, could put pressure on the Corp valuation."
Meanwhile, the longstanding valuation spread between the stocks has already dropped to less than four per cent from 9.3 per cent and will continue to narrow, Huang said.
"[There] may be some offset from PLC holders selling if unable to hold Corp," he said.
In any event, London shares are likely to be driven down in value by virtue of the delisting announcement alone, so Huang has reiterated his "sell" rating and kept his price target of $23.50.
Todd Bourell, a partner at hedge fund ValueAct Capital, which owns 12 million Thomson Reuters shares in London and is one of the company's largest shareholders, said Thomson Reuters' London listing had become problematic for the company.
"The fact that the stock is irrationally undervalued in London is putting a drag on the value of the stock in New York and Toronto," Bourell said.
Canada's Thomson family is the largest shareholder of Thomson Reuters and holds a 55 per cent voting interest.
The Financial Times blamed “a more parochial investment approach” for bogging down Thomson Reuters.
“For a company that makes much of its money from professionals in globalised markets moving capital across borders at high speed, Thomson Reuters became oddly bogged down by a more parochial investment approach,” it said.
When Thomson Corp swooped on Reuters in the summer of 2007, it knew that some UK investors would have trouble holding the paper in its half-cash, half-shares £7.9 billion offer, the FT said.
To avoid a large scale defection of domestic institutions, it turned to a well-worn structure: the dual-listed company, or DLC.
The theory was that shareholders on either side of the Atlantic should be allowed to trade instruments of identical value, taking currency into account, on the local market of their choice.
Reuters’ London shares initially traded at a discount to Thomson’s North American listings until the deal completed in April 2008.
Such gaps are typical with uncompleted deals, as hedge funds bet on possible regulatory delays and other hurdles. Unusually, however, the discount did not disappear when the deal closed.
Over the year, the London line traded on average at a 15 per cent discount to the Toronto quote.
An instrument designed to smooth the takeover instead became an unexpected illustration of the inefficiencies that still exist in modern global markets, the FT said.
The fact that the DLC structure failed to behave as expected was described on Monday by one person close to the company as “irrational”, but analysts identify a number of reasons.
One factor was that the high concentration of the Thomson family’s stake in Canada limited liquidity in Toronto, benefiting the price by restricting opportunities for borrowing stock to sell short.
The simplest explanation, however, may be that UK investors have taken a more bearish stance towards the company, the FT said.
“Their North American peers, many in the company believe, focus less obsessively on the financial data business that serves hard-hit Wall Street and City of London traders and give more weight to its legal, scientific, healthcare, tax and accounting operations.”
For the group, a unified capital structure opens up the possibility of more stock-based acquisitions once turbulence subsides. Having two differently valued instruments could have complicated potential takeovers, especially while more than $5 billion of liquidity was effectively trapped in a pool outside North America.
According to Glocer: “In an age where our markets are global and electronic, brought that way in part because of us at Thomson Reuters, where these shares are traded is much less important to me than where our customers, employees and footprint are.”
● SOURCE Reuters | Financial Post | Financial Times
Monday’s board decision prompted a jump in the shares on Tuesday, but the rally was tempered by fears some large British shareholders will have to cut or sell their stakes.
Chief executive Tom Glocer said he hoped UK shareholders – only five per cent of the company's combined shareholder base – would retain their investments after the reorganisation, but major institutional investors are likely to sell many or all of their shares, given the funds they manage are UK focused.
Reuters reported: "Tom Glocer was good enough to come and see me yesterday afternoon together with the two other remaining institutional shareholders in London, and I am bitterly disappointed," said one top-10 institutional investor who wished to remain anonymous.
The fund manager said he had hoped the company would leave it five years before reaching a decision on its listings.
"The dozy old UK institutions and sell-side analysts are only just realising that Thomson Reuters is a much better company than they thought," he said. "I think investors would have really come back to this one ... It's a real shame."
The company said the fragmentation in its share structure was deterring some investors.
Analysts at Numis Securities said they could see the benefits the simpler shareholder structure would bring but that they too were disappointed by the move.
"We have been firm supporters of the group, which was one of our key picks in Media 2009, and are therefore greatly saddened to see the delisting," they wrote, adding that many UK institutional investors would likely have to sell their stakes.
Numis had a “hold” rating on the London-listed stock prior to news of the reorganisation but upgraded it to “add” in order to reflect the discount relative to the US shares.
UBS analysts said any upside to the shares may be capped by the fact some institutional shareholders would have to sell stock and were less enthusiastic about the company's prospects, retaining a "sell" rating.
"We continue to believe the the fundamental value of the group overall remains too high," UBS analyst Phillip Huang said in a note. "We would expect to see evidence of deteriorating momentum near future, which combined with imminent increased liquidity, could put pressure on the Corp valuation."
Meanwhile, the longstanding valuation spread between the stocks has already dropped to less than four per cent from 9.3 per cent and will continue to narrow, Huang said.
"[There] may be some offset from PLC holders selling if unable to hold Corp," he said.
In any event, London shares are likely to be driven down in value by virtue of the delisting announcement alone, so Huang has reiterated his "sell" rating and kept his price target of $23.50.
Todd Bourell, a partner at hedge fund ValueAct Capital, which owns 12 million Thomson Reuters shares in London and is one of the company's largest shareholders, said Thomson Reuters' London listing had become problematic for the company.
"The fact that the stock is irrationally undervalued in London is putting a drag on the value of the stock in New York and Toronto," Bourell said.
Canada's Thomson family is the largest shareholder of Thomson Reuters and holds a 55 per cent voting interest.
The Financial Times blamed “a more parochial investment approach” for bogging down Thomson Reuters.
“For a company that makes much of its money from professionals in globalised markets moving capital across borders at high speed, Thomson Reuters became oddly bogged down by a more parochial investment approach,” it said.
When Thomson Corp swooped on Reuters in the summer of 2007, it knew that some UK investors would have trouble holding the paper in its half-cash, half-shares £7.9 billion offer, the FT said.
To avoid a large scale defection of domestic institutions, it turned to a well-worn structure: the dual-listed company, or DLC.
The theory was that shareholders on either side of the Atlantic should be allowed to trade instruments of identical value, taking currency into account, on the local market of their choice.
Reuters’ London shares initially traded at a discount to Thomson’s North American listings until the deal completed in April 2008.
Such gaps are typical with uncompleted deals, as hedge funds bet on possible regulatory delays and other hurdles. Unusually, however, the discount did not disappear when the deal closed.
Over the year, the London line traded on average at a 15 per cent discount to the Toronto quote.
An instrument designed to smooth the takeover instead became an unexpected illustration of the inefficiencies that still exist in modern global markets, the FT said.
The fact that the DLC structure failed to behave as expected was described on Monday by one person close to the company as “irrational”, but analysts identify a number of reasons.
One factor was that the high concentration of the Thomson family’s stake in Canada limited liquidity in Toronto, benefiting the price by restricting opportunities for borrowing stock to sell short.
The simplest explanation, however, may be that UK investors have taken a more bearish stance towards the company, the FT said.
“Their North American peers, many in the company believe, focus less obsessively on the financial data business that serves hard-hit Wall Street and City of London traders and give more weight to its legal, scientific, healthcare, tax and accounting operations.”
For the group, a unified capital structure opens up the possibility of more stock-based acquisitions once turbulence subsides. Having two differently valued instruments could have complicated potential takeovers, especially while more than $5 billion of liquidity was effectively trapped in a pool outside North America.
According to Glocer: “In an age where our markets are global and electronic, brought that way in part because of us at Thomson Reuters, where these shares are traded is much less important to me than where our customers, employees and footprint are.”
● SOURCE Reuters | Financial Post | Financial Times
Thomson Reuters Q1 profit beats forecasts
Thursday 07 May 2009
Thomson Reuters reported better-than-expected first quarter profit on Thursday as it kept a tight control on costs. The company reaffirmed its expectation that revenue will grow this year.
CEO Tom Glocer said the climate in the market had improved but not enough to rule out further weakness.
"I can't really call exactly where the bottom is. There can be false dawns. Right now sentiment is quite good in the market. We see them opening up their purse strings just a little bit," he said.
The London-listed shares closed a tad under 44 pence lower at 1,812 pence, down 2.37 per cent, after hitting a record high of 1,939 before the results were released.
Greater losses were registered in New York and Toronto.
In New York, Thomson Reuters shares closed 5.73 per cent lower at $29.77, a loss of $1.81.
On NASDAQ, the shares closed at $161.51, down $7.98 or 4.71 per cent.
In Toronto, the fall was 4.75 per cent or C$1.75 to a close of C$35.08.
Thomson Reuters’ Q1 net income was $228 million, or 27 cents a share, compared with $194 million, or 30 cents a share, a year ago.
Underlying operating profit, excluding amortisation, integration costs and other items, rose two per cent to $588 million, or 40 cents per share, beating the average analyst forecast of 34 cents per share.
Revenue from ongoing businesses was $3.12 billion, down three per cent from a year ago but up three per cent before currency effects. Analysts on average were expecting revenue of $3.17 billion.
The company reaffirmed its outlook for revenue to grow in 2009, and for underlying operating margin and free cash flow to be comparable to 2008, supported by revenue growth and the expected savings from integration programmes.
Thomson Reuters has said it expects annualised cost savings of $1 billion by the end of 2011, and Glocer said that while this was a good target, he did not rule out more.
Revenue in the Markets division, which supplies news and data to financial institutions, fell seven per cent to $1.85 billion, hurt by lower transaction volumes and job cuts. But the revenue would have risen 0.4 per cent before currency effects.
Though the outlook has brightened in recent weeks, financial institutions have been hit by closures, mergers and deep job cuts, and Reuters reported that the company is regarded by some analysts as the riskiest bet among professional information providers due to its exposure to the financial sector for about 60 per cent of group sales.
But strong execution, a high proportion of subscription and digital revenues, and the resilience of the Professional unit have helped to drive up Thomson Reuters London-listed shares by more than 20 per cent in the year to date.
Revenue at the Professional division, which supplies information to lawyers, scientists, accountants and the healthcare industry, rose two per cent to $1.27 billion, or five per cent excluding currency effects.
Glocer told the Financial Times that Thomson Reuters can take market share from rivals once turbulent financial and legal markets revive.
Bloomberg’s fall in terminal numbers by 2.5 per cent since November suggested “a much stronger descent than we’re seeing” in the markets business where they compete, Glocer said. “I certainly feel we’re at least holding our own.”
Much of the market share gains the group foresees would come from taking over the “do-it-yourself” data efforts of large banks and other customers, he said. Subscriptions had risen by two per cent in the markets business, while transaction revenues had fallen, but would rebound quickly in a recovery, he added.
“It feels like sentiment has changed in the last month,” Glocer told the FT, “but we don’t run our business on the basis that we need to clutch at green shoots.”
Robert Daleo, chief financial officer, said savings from integration were ahead of plan, adding that when combined with earlier initiatives these were on track to meet a $1.4 billion target by 2011.
● CLICK to read a transcript of the analysts’ webcast by Tom Glocer and Robert Daleo.
● SOURCE Reuters | Financial Times
CEO Tom Glocer said the climate in the market had improved but not enough to rule out further weakness.
"I can't really call exactly where the bottom is. There can be false dawns. Right now sentiment is quite good in the market. We see them opening up their purse strings just a little bit," he said.
The London-listed shares closed a tad under 44 pence lower at 1,812 pence, down 2.37 per cent, after hitting a record high of 1,939 before the results were released.
Greater losses were registered in New York and Toronto.
In New York, Thomson Reuters shares closed 5.73 per cent lower at $29.77, a loss of $1.81.
On NASDAQ, the shares closed at $161.51, down $7.98 or 4.71 per cent.
In Toronto, the fall was 4.75 per cent or C$1.75 to a close of C$35.08.
Thomson Reuters’ Q1 net income was $228 million, or 27 cents a share, compared with $194 million, or 30 cents a share, a year ago.
Underlying operating profit, excluding amortisation, integration costs and other items, rose two per cent to $588 million, or 40 cents per share, beating the average analyst forecast of 34 cents per share.
Revenue from ongoing businesses was $3.12 billion, down three per cent from a year ago but up three per cent before currency effects. Analysts on average were expecting revenue of $3.17 billion.
The company reaffirmed its outlook for revenue to grow in 2009, and for underlying operating margin and free cash flow to be comparable to 2008, supported by revenue growth and the expected savings from integration programmes.
Thomson Reuters has said it expects annualised cost savings of $1 billion by the end of 2011, and Glocer said that while this was a good target, he did not rule out more.
Revenue in the Markets division, which supplies news and data to financial institutions, fell seven per cent to $1.85 billion, hurt by lower transaction volumes and job cuts. But the revenue would have risen 0.4 per cent before currency effects.
Though the outlook has brightened in recent weeks, financial institutions have been hit by closures, mergers and deep job cuts, and Reuters reported that the company is regarded by some analysts as the riskiest bet among professional information providers due to its exposure to the financial sector for about 60 per cent of group sales.
But strong execution, a high proportion of subscription and digital revenues, and the resilience of the Professional unit have helped to drive up Thomson Reuters London-listed shares by more than 20 per cent in the year to date.
Revenue at the Professional division, which supplies information to lawyers, scientists, accountants and the healthcare industry, rose two per cent to $1.27 billion, or five per cent excluding currency effects.
Glocer told the Financial Times that Thomson Reuters can take market share from rivals once turbulent financial and legal markets revive.
Bloomberg’s fall in terminal numbers by 2.5 per cent since November suggested “a much stronger descent than we’re seeing” in the markets business where they compete, Glocer said. “I certainly feel we’re at least holding our own.”
Much of the market share gains the group foresees would come from taking over the “do-it-yourself” data efforts of large banks and other customers, he said. Subscriptions had risen by two per cent in the markets business, while transaction revenues had fallen, but would rebound quickly in a recovery, he added.
“It feels like sentiment has changed in the last month,” Glocer told the FT, “but we don’t run our business on the basis that we need to clutch at green shoots.”
Robert Daleo, chief financial officer, said savings from integration were ahead of plan, adding that when combined with earlier initiatives these were on track to meet a $1.4 billion target by 2011.
● CLICK to read a transcript of the analysts’ webcast by Tom Glocer and Robert Daleo.
● SOURCE Reuters | Financial Times
Reuters to beat Bloomberg out of global crisis - FT
Monday 27 April 2009
Reuters may fare better than Bloomberg in the current financial crisis, the Financial Times said on Monday.
Thanks to a technological shift, instead of just wholesaling news and data, wire services can in theory also sell it direct to consumers via the internet or mobile applications. But advertising is scarce and such retail schemes, which cannibalise wholesale revenues, have floundered in the past, it said.
A bigger problem is the banking crisis. Peter Grauer, Bloomberg’s chairman, believes the financial services industry will cut its information spending by 20 per cent this year.
“Such shrinkage offers a replay of the slugging match during the dotcom downturn, when Bloomberg got the better of Reuters, its duopolistic financial information rival,” the FT said.
“This time Reuters may fare better. Bloomberg can’t count on the hedge funds it courted in the 2000s to pick up the slack. It is dominant in fixed-income, not the best place to be; Reuters is stronger in forex and commodities. Furthermore, Thomson Reuters’ legal and medical information provide extra ballast. Bloomberg’s largely one-trick business model, renting terminals at $1,590 per month, hinges on body count. Thanks to savings from the merger, Thomson Reuters shares trade at 15 times forecast earnings, a 32 per cent premium to its peers. Bad news can only await such a high wire rating.”
Analysts expect the global financial crisis to have profound consequences for the industry, but what those will be is far from obvious, the FT said.
Lengthy subscriptions mean cuts by customers take time to filter through, and even in the quarter when Lehman Brothers collapsed, transactional revenues rose thanks to volatility in commodity and foreign exchange markets.
“Only now, as first-quarter figures begin to come through, are investors watching anxiously for the early signs of the credit crunch’s impact. Citigroup analysts noted last week that transaction revenues could be down 40 per cent,” the FT said.
There is considerable uncertainty about the extent to which financial companies will retain overlapping, or similar services given the pressure on services. Although at the same time heightened scrutiny on valuations and increased regulatory demands could help support the industry.
Not all are affected equally. Citigroup argued that Thomson Reuters could fare better than Bloomberg because the latter had been more exposed to harder-hit fixed-income and asset-backed securities traders and hedge funds.
One analyst, who would not be named, said Bloomberg was taking an “aggressively proactive” approach to persuading customers to keep their terminals.
The analyst told the FT that Thomson Reuters, which is less dependent on terminal sales than in past downturns, was fighting back ahead of launching its first common platform since the former Thomson Financial and Reuters businesses combined a year ago.
Thomson Reuters’ London-listed shares are now at the same level as last May. Over the same period the FTSE has dropped 35 per cent.
The London shares closed on Monday at 1,705 pence, 0.99 per cent below their 52-week high of 1,722 set nine trading days ago on 14 April.
● SOURCE Financial Times
Thanks to a technological shift, instead of just wholesaling news and data, wire services can in theory also sell it direct to consumers via the internet or mobile applications. But advertising is scarce and such retail schemes, which cannibalise wholesale revenues, have floundered in the past, it said.
A bigger problem is the banking crisis. Peter Grauer, Bloomberg’s chairman, believes the financial services industry will cut its information spending by 20 per cent this year.
“Such shrinkage offers a replay of the slugging match during the dotcom downturn, when Bloomberg got the better of Reuters, its duopolistic financial information rival,” the FT said.
“This time Reuters may fare better. Bloomberg can’t count on the hedge funds it courted in the 2000s to pick up the slack. It is dominant in fixed-income, not the best place to be; Reuters is stronger in forex and commodities. Furthermore, Thomson Reuters’ legal and medical information provide extra ballast. Bloomberg’s largely one-trick business model, renting terminals at $1,590 per month, hinges on body count. Thanks to savings from the merger, Thomson Reuters shares trade at 15 times forecast earnings, a 32 per cent premium to its peers. Bad news can only await such a high wire rating.”
Analysts expect the global financial crisis to have profound consequences for the industry, but what those will be is far from obvious, the FT said.
Lengthy subscriptions mean cuts by customers take time to filter through, and even in the quarter when Lehman Brothers collapsed, transactional revenues rose thanks to volatility in commodity and foreign exchange markets.
“Only now, as first-quarter figures begin to come through, are investors watching anxiously for the early signs of the credit crunch’s impact. Citigroup analysts noted last week that transaction revenues could be down 40 per cent,” the FT said.
There is considerable uncertainty about the extent to which financial companies will retain overlapping, or similar services given the pressure on services. Although at the same time heightened scrutiny on valuations and increased regulatory demands could help support the industry.
Not all are affected equally. Citigroup argued that Thomson Reuters could fare better than Bloomberg because the latter had been more exposed to harder-hit fixed-income and asset-backed securities traders and hedge funds.
One analyst, who would not be named, said Bloomberg was taking an “aggressively proactive” approach to persuading customers to keep their terminals.
The analyst told the FT that Thomson Reuters, which is less dependent on terminal sales than in past downturns, was fighting back ahead of launching its first common platform since the former Thomson Financial and Reuters businesses combined a year ago.
Thomson Reuters’ London-listed shares are now at the same level as last May. Over the same period the FTSE has dropped 35 per cent.
The London shares closed on Monday at 1,705 pence, 0.99 per cent below their 52-week high of 1,722 set nine trading days ago on 14 April.
● SOURCE Financial Times
Pay boom for Thomson Reuters executives
Thursday 02 April 2009
Six senior executives of Thomson Reuters have been given share awards that could be worth $61 million, the Financial Times reported on Thursday.
The awards come after a year in which profits and revenues grew ahead of expectations but fears about the health of the financial and professional customers on which it depends also grew.
Tom Glocer, CEO, was granted restricted stock units valued at a potential $26.1 million over five years. The awards are not subject to performance criteria, the FT said.
“Separate cash and stock bonuses, and $757,000 relocation expenses, mean Glocer’s compensation jumped from £2.61 million for his last year at Reuters to $8.91 million for his first at the helm of the enlarged group,” it said.
A spokesman said the rise reflected larger responsibilities, performance achievements and currency swings. A similar one-time grant to Devin Wenig, chief executive of the markets division, was valued at $15.9 million, on top of a $4.54 million compensation package for the year.
Thomson Reuters said the awards for the two former Reuters executives, which exceeded those to former Thomson directors, were in part a reflection of the fact that they could not join Thomson’s defined pension plan for executives, which is now closed to new participants.
The details come amid heated argument about executive compensation, particularly in the Wall Street and City firms served by Thomson Reuters, and after contentious contract negotiations with some editorial staff, the FT said.
“But the company has little to fear from shareholder opposition to the rewards as it is 55 per cent controlled by the Woodbridge Company, which represents the Thomson family’s holding.”
Geoff Beattie, president of Woodbridge, was also granted restricted stock units with a theoretical value of $3.57 million. Niall FitzGerald, former Reuters chairman, received restricted stock valued at $707,000. The two deputy chairmen were architects of the Thomson Reuters deal.
The rewards followed a year in which the group hit the top end of its forecasts, with eight per cent pro forma revenue growth and a 19 per cent increase in underlying operating profit.
Last month it accelerated estimates of integration savings from the merger, raised the dividend and predicted further organic growth in 2009.
Executive salaries will be frozen this year, after Glocer’s basic salary slipped from the sterling equivalent of $1.67 million to $1.55 million.
A compensation committee report said it had aimed to increase the portion of his compensation tied to performance.
The Daily Mail said: “In an age of shrinking banking bonuses, the staggering payout made American Tom Glocer one of the highest earners in corporate Britain last year.
“The 49-year old lawyer hit the jackpot after merging Reuters, where he was chief executive, with North American media conglomerate Thomson.
“An estimated £15m share option package was triggered when the £9bn deal was finally given the green light last March.
“But the gravy train gathered more speed when Glocer pitched up in the US as head of the enlarged data and publishing giant and was handed share options worth over £18m in Thomson-Reuters.”
His basic pay at Reuters was a relatively modest £900,000. Glocer is aiming to cut overheads by nearly £1 billion – in a move that will see him slash jobs at the combined financial markets divisions.
The Mail said Thomson Reuters’ annual report published on Monday offers a tantalising glimpse into the pay and perks commonplace in US boardrooms.
“But his sweeteners could revive painful memories for longstanding shareholders.
“Glocer came under fire over the £230,000 annual rent Reuters used to pay for his London home.
“Reuters shares have lost less than a tenth of their value over the past year, making them among the best performers in the battered media sector.”
● SOURCE Financial Times | Daily Mail
The awards come after a year in which profits and revenues grew ahead of expectations but fears about the health of the financial and professional customers on which it depends also grew.
Tom Glocer, CEO, was granted restricted stock units valued at a potential $26.1 million over five years. The awards are not subject to performance criteria, the FT said.
“Separate cash and stock bonuses, and $757,000 relocation expenses, mean Glocer’s compensation jumped from £2.61 million for his last year at Reuters to $8.91 million for his first at the helm of the enlarged group,” it said.
A spokesman said the rise reflected larger responsibilities, performance achievements and currency swings. A similar one-time grant to Devin Wenig, chief executive of the markets division, was valued at $15.9 million, on top of a $4.54 million compensation package for the year.
Thomson Reuters said the awards for the two former Reuters executives, which exceeded those to former Thomson directors, were in part a reflection of the fact that they could not join Thomson’s defined pension plan for executives, which is now closed to new participants.
The details come amid heated argument about executive compensation, particularly in the Wall Street and City firms served by Thomson Reuters, and after contentious contract negotiations with some editorial staff, the FT said.
“But the company has little to fear from shareholder opposition to the rewards as it is 55 per cent controlled by the Woodbridge Company, which represents the Thomson family’s holding.”
Geoff Beattie, president of Woodbridge, was also granted restricted stock units with a theoretical value of $3.57 million. Niall FitzGerald, former Reuters chairman, received restricted stock valued at $707,000. The two deputy chairmen were architects of the Thomson Reuters deal.
The rewards followed a year in which the group hit the top end of its forecasts, with eight per cent pro forma revenue growth and a 19 per cent increase in underlying operating profit.
Last month it accelerated estimates of integration savings from the merger, raised the dividend and predicted further organic growth in 2009.
Executive salaries will be frozen this year, after Glocer’s basic salary slipped from the sterling equivalent of $1.67 million to $1.55 million.
A compensation committee report said it had aimed to increase the portion of his compensation tied to performance.
The Daily Mail said: “In an age of shrinking banking bonuses, the staggering payout made American Tom Glocer one of the highest earners in corporate Britain last year.
“The 49-year old lawyer hit the jackpot after merging Reuters, where he was chief executive, with North American media conglomerate Thomson.
“An estimated £15m share option package was triggered when the £9bn deal was finally given the green light last March.
“But the gravy train gathered more speed when Glocer pitched up in the US as head of the enlarged data and publishing giant and was handed share options worth over £18m in Thomson-Reuters.”
His basic pay at Reuters was a relatively modest £900,000. Glocer is aiming to cut overheads by nearly £1 billion – in a move that will see him slash jobs at the combined financial markets divisions.
The Mail said Thomson Reuters’ annual report published on Monday offers a tantalising glimpse into the pay and perks commonplace in US boardrooms.
“But his sweeteners could revive painful memories for longstanding shareholders.
“Glocer came under fire over the £230,000 annual rent Reuters used to pay for his London home.
“Reuters shares have lost less than a tenth of their value over the past year, making them among the best performers in the battered media sector.”
● SOURCE Financial Times | Daily Mail
Brass for the brass
Monday 30 March 2009
Chief executive Tom Glocer, 49, received a $36.6 million package in 2008.
Chief financial officer Robert Daleo, 59, received $14 million. James Smith, 49, president and chief executive of the professional division, took home $5.2 million.
All three executives received a significant part of their compensation in the form of one-time stock option grants aimed at providing performance incentive.
The figures are disclosed in Thomson Reuters’ annual report published on Monday.
The company is one of the few that managed to avoid getting caught in the financial meltdown that claimed so many victims across the economic spectrum, reporting stellar results for 2008, and it is compensating its executives accordingly, the online Financial Post reported.
"Our overall philosophy regarding executive compensation is to pay for performance," the company’s Management Information Circular stated. "We believe this drives our management team to achieve higher levels of results for the benefit of Thomson Reuters and our shareholders."
In 2008 Q4, Thomson Reuters reported net income of $565 million, or 79¢ a share, compared with $432 million, or 67¢ a share.
The largest component of Glocer's pay package was a one-time grant of 700,000 restricted share units that will vest 20 per cent each year for five years providing performance goals are met. His "normal annual compensation" came in at $8.9 million.
Glocer holds 650,231 Thomson Reuters PLC shares.
Daleo went home with $6 million in normal annual compensation and Smith received $5.2 million.
Less than 20 per cent of the total take-home of top executives is described as base salary. The rest is a mix of cash and stock incentives, pension entitlements and "other" compensation.
Financial Post noted that disclosure of executive compensation comes at a time when companies around the world are under pressure from shareholders to keep a lid on management pay.
Thomson Reuters said it expects higher revenues this year despite continuing turmoil on financial markets thanks to diversification into developing countries that are still experiencing growth.
Shares in Thomson Reuters declined 1.43 per cent to 1510 pence on the London Stock Exchange. Despite considerable volatility, the shares are trading at about the same level as they were at the end of March 2008, Financial Post noted.
● SOURCE Financial Post
Thomson Reuters sees higher sales despite softer markets
Monday 30 March 2009
Thomson Reuters said on Monday it expects higher revenues this year despite job losses in the financial services industry on which it depends for most of its revenues.
The company said in its annual report that financial conditions were challenging but it was well positioned geographically and by business segment to survive the global economic downturn.
"We expect large global banks and institutions in the United States, United Kingdom and Western Europe to be most affected. However, we anticipate that emerging markets will continue to grow, albeit at a slower pace," the company said.
It repeated the forecast it made in February of an underlying operating margin and cash flow comparable to those of 2008.
"We do not believe that our information is a discretionary purchase for our Markets division customers, but rather a necessity for them to run their businesses on a daily basis," Thomson Reuters said.
The company's markets division, which supplies news and data to financial institutions, brings in about 57 per cent of sales and 42 per cent of profits.
The rest is accounted for by the professional division, which sells news and information to lawyers, medical and healthcare professionals and accountants.
Thomson Reuters said it expected the economic environment for its professional division customers to soften this year, although it said those markets were historically resilient.
"We believe the professional markets we serve continue to offer opportunities for growth, albeit at lower rates than in 2008," it said.
"We expect the margins for Professional to be impacted in 2009 by investments in global expansion initiatives as well as a shift to higher growth software and services products."
Thomson Reuters' London-listed shares closed down 1.4 per cent at 1514 pence. In Toronto, the stock fell C$0.40 to C$30.80.
The company said it believed cash from its operations and available credit facilities would be sufficient to fund its cash dividends, debt servicing, capital expenditure, normal acquisitions and share buybacks.
Thomson Reuters has access to a $2.5 billion syndicated credit facility until August 2012. It also issued about $3 billion of long-term debt securities last year.
The company's net debt more than doubled to $6.76 billion by the end of 2008 from a year earlier, mainly due to Thomson's April 2008 acquisition of Reuters. Most of it is in U.S. dollars or has been swapped into U.S. dollar obligations.
The annual report is available in the Investor Relations section on ● www.thomsonreuters.com. Hard copies may be obtained, free of charge, by contacting Thomson Reuters Investor Relations at ● investor.relations@thomsonreuters.com or by phone at +1 800 969 9974.
● SOURCE Reuters
The company said in its annual report that financial conditions were challenging but it was well positioned geographically and by business segment to survive the global economic downturn.
"We expect large global banks and institutions in the United States, United Kingdom and Western Europe to be most affected. However, we anticipate that emerging markets will continue to grow, albeit at a slower pace," the company said.
It repeated the forecast it made in February of an underlying operating margin and cash flow comparable to those of 2008.
"We do not believe that our information is a discretionary purchase for our Markets division customers, but rather a necessity for them to run their businesses on a daily basis," Thomson Reuters said.
The company's markets division, which supplies news and data to financial institutions, brings in about 57 per cent of sales and 42 per cent of profits.
The rest is accounted for by the professional division, which sells news and information to lawyers, medical and healthcare professionals and accountants.
Thomson Reuters said it expected the economic environment for its professional division customers to soften this year, although it said those markets were historically resilient.
"We believe the professional markets we serve continue to offer opportunities for growth, albeit at lower rates than in 2008," it said.
"We expect the margins for Professional to be impacted in 2009 by investments in global expansion initiatives as well as a shift to higher growth software and services products."
Thomson Reuters' London-listed shares closed down 1.4 per cent at 1514 pence. In Toronto, the stock fell C$0.40 to C$30.80.
The company said it believed cash from its operations and available credit facilities would be sufficient to fund its cash dividends, debt servicing, capital expenditure, normal acquisitions and share buybacks.
Thomson Reuters has access to a $2.5 billion syndicated credit facility until August 2012. It also issued about $3 billion of long-term debt securities last year.
The company's net debt more than doubled to $6.76 billion by the end of 2008 from a year earlier, mainly due to Thomson's April 2008 acquisition of Reuters. Most of it is in U.S. dollars or has been swapped into U.S. dollar obligations.
The annual report is available in the Investor Relations section on ● www.thomsonreuters.com. Hard copies may be obtained, free of charge, by contacting Thomson Reuters Investor Relations at ● investor.relations@thomsonreuters.com or by phone at +1 800 969 9974.
● SOURCE Reuters
Thomson Reuters announces C$750 million note offering
Thursday 26 March 2009
Thomson Reuters announced it has entered into an agency agreement with a syndicate of Canadian investment dealers for a public offering in Canada of C$750 million of 6.0 per cent notes due 2016.
Proceeds are expected to be used for general corporate purposes including debt repayment due this year.
The notes are being issued by Thomson Reuters Corporation and will be unconditionally guaranteed by Thomson Reuters PLC. The offering is expected to close on 31 March subject to customary closing conditions. The notes are not being offered or sold in the United States.
Fitch Ratings has assigned an 'A-' rating to the notes. Fitch currently rates Thomson Reuters and its subsidiaries as follows:
Thomson Reuters Corp:
● Issuer Default Rating (IDR) 'A-'
● Bank credit facility 'A-'
● Senior unsecured notes 'A-'
● Commercial paper 'F2'
● Short-term IDR 'F2'.
Reuters Group Limited:
● IDR 'A-'.
Reuters Finance PLC:
● IDR 'A-'
● Senior unsecured 'A-'.
Fitch said the ratings reflect the company’s meaningful cash flow generating ability, its sound balance sheet and its consistent and conservative financial policies. At the end of 2008, proforma unadjusted net leverage was within management's targeted range of at or below two times.
The ratings also reflect Thomson Reuters’ growth prospects, as well as the product line and geographic diversity of its cash flow stream, it said.
“Fitch recognizes there are meaningful barriers to entry in TRI's core businesses and that there are a limited number of well-capitalized, rational competitors that compete predominantly on product differentiation, quality and delivery (rather than on price).
“Unlike traditional advertising-based consumer media subsectors, TRI has already made the transition to electronic delivery and faces very little threat of substitution by digital transplants.
“Rating concerns center predominantly on the cyclicality of the Markets division, however, Fitch notes there is meaningful room in the rating to accommodate potential cyclical weakness in the Markets division. Also, integration and acquisition risk remain concerns. As with other highly rated companies, the potential threat of financial policy revisions is always a concern, although Fitch believes these issues are sufficiently mitigated.”
● SOURCE Yahoo Finance | Fitch Ratings
Proceeds are expected to be used for general corporate purposes including debt repayment due this year.
The notes are being issued by Thomson Reuters Corporation and will be unconditionally guaranteed by Thomson Reuters PLC. The offering is expected to close on 31 March subject to customary closing conditions. The notes are not being offered or sold in the United States.
Fitch Ratings has assigned an 'A-' rating to the notes. Fitch currently rates Thomson Reuters and its subsidiaries as follows:
Thomson Reuters Corp:
● Issuer Default Rating (IDR) 'A-'
● Bank credit facility 'A-'
● Senior unsecured notes 'A-'
● Commercial paper 'F2'
● Short-term IDR 'F2'.
Reuters Group Limited:
● IDR 'A-'.
Reuters Finance PLC:
● IDR 'A-'
● Senior unsecured 'A-'.
Fitch said the ratings reflect the company’s meaningful cash flow generating ability, its sound balance sheet and its consistent and conservative financial policies. At the end of 2008, proforma unadjusted net leverage was within management's targeted range of at or below two times.
The ratings also reflect Thomson Reuters’ growth prospects, as well as the product line and geographic diversity of its cash flow stream, it said.
“Fitch recognizes there are meaningful barriers to entry in TRI's core businesses and that there are a limited number of well-capitalized, rational competitors that compete predominantly on product differentiation, quality and delivery (rather than on price).
“Unlike traditional advertising-based consumer media subsectors, TRI has already made the transition to electronic delivery and faces very little threat of substitution by digital transplants.
“Rating concerns center predominantly on the cyclicality of the Markets division, however, Fitch notes there is meaningful room in the rating to accommodate potential cyclical weakness in the Markets division. Also, integration and acquisition risk remain concerns. As with other highly rated companies, the potential threat of financial policy revisions is always a concern, although Fitch believes these issues are sufficiently mitigated.”
● SOURCE Yahoo Finance | Fitch Ratings
Thomson Reuters profit beats forecasts, sees 2009 revenue growth
Tuesday 24 February 2009
Thomson Reuters reported stronger-than-expected quarterly profit on Tuesday and said it expected revenue to grow in 2009 despite job cuts and decreased spending among financial industry customers.
The company also said it expected its underlying operating margin this year to be comparable to 2008, supported by revenue growth and higher savings from integration.
"I think the good thing is that we're giving outlook at all. I've seen so many companies with supposedly decent visibility into their business this year pull back and say, 'Well it's too hard,'" chief executive Tom Glocer said in an interview with Reuters.
Thomson Reuters reported 2008 Q4 net income of $656 million, or 79 cents a share, compared with $432 million, or 67 cents a share, a year earlier.
Profit from ongoing businesses, excluding special items, was 57 cents per share, beating the average analyst forecast of 39 cents.
Revenue in the company's closely watched markets division, which serves financial institutions, fell two per cent to $1.9 billion. Overall revenue was flat at $3.4 billion.
"I think it's going to continue to do better than people expect," Glocer said, referring to the markets division.
"It is hard to see anything else outside the doom and gloom in the two financial and media capitals," he said. "It's going to be a tough year, but when you put it all together, we still think the company will be able to show growth."
The professional division, which sells databases and other information to lawyers, accountants, scientists and the healthcare industry, reported revenue of $1.5 billion in Q4, up three per cent. The rise came in part from online, software and services revenue growth of 10 per cent.
The board has approved an increase in the dividend by four cents per share on an annualised basis. The quarterly dividend payable on March 26 is 28 cents per share.
Thomson Reuters raised its forecast for annualised cost savings from the merger to $1 billion by the end of 2011, up from $750 million projected in May 2008.
The integration plan does not include any new rounds of layoffs, Glocer said.
Pressed to comment on the rate of cancellations seen so far this year, Glocer said: "The one thing I can guarantee is there will be cancellations and there will be new recurring subscription sales, and actually the year isn't off badly on that score.”
Glocer attributed the results to Thomson's basic business model, providing "must-have" information to people who are willing to pay for it. "This is not a luxury good or discretionary purchase," he said during a conference call. "This is must-have information that our customers need to run their businesses."
Glocer also said the integration of Thomson and Reuters was moving more quickly than expected, helping to cut costs.
The Financial Times said concern over the outlook for financial services still drives investors’ perception of the stock, and helps explain the wide variation in perceptions of the company in Toronto, where professional assets such as WestLaw are better known, and London, where City sentiment pervades investors’ views of the company.
“The London listing was trading at a 15 per cent discount to the North American quotes on Tuesday morning, but Mr Glocer expressed no urgency about resolving this by ending the dual-listed company structure,” the FT said.
“This is one we haven’t had to spend any time on,” he said. “Either people will buy in [to the growth story] locally [in London] and it solves itself or the shareholder register turns more North American and it solves itself.”
His message, instead, was that Thomson Reuters can stand out from much of the sector in which its shares are categorised. “We can invest at a time when a lot of pure media companies are cutting back,” he said.
“Asked by one of his own reporters whether such investment might include an interest in one of the newspaper companies whose valuations have suffered dramatically, Mr Glocer was clear that he had little appetite for consumer media,” the FT said.
In theory, the $1.8 billion of free cashflow reported by last year would be enough to buy The New York Times, the FT said, but Glocer cautioned: “I’m not convinced we know how to run a newspaper any better than the ones who are running them today, and boy it looks a tough struggle.”
Glocer said the company was on course to see revenues rise next year, driven by forecast growth in Asia, the Gulf and Latin America.
"We're definitely going to be prioritising markets where there's strong growth," he said. "Tactically, it's easier to push on an open door than slam against one."
The £8.7 billion merger of Thomson and Reuters was expected to produce cost-savings of $750 million but the company said annualised benefits would now be closer to $1 billion from 2011.
"Our markets division is entirely a legitimate concern given what we've seen at companies like RBS, Lloyds and Citi," Glocer said. "But what analysts don't appreciate when they're at the heart of the financial crisis in London or New York, is that in many markets around the world - in Asia, the Gulf and Latin America - there is less gloom."
Thomson Reuters shares closed 11.56 per cent higher in New York, 11.47 per cent higher in Toronto, 10.39 per cent higher on NASDAQ and 6.58 per cent higher in London.
The FT said the persistence of a yawning gap between the group’s North American and London-listed shares is embarrassing.
“The 18 per cent discount at which the London listing trades to the US and Canadian listings is an operational irrelevance. Mr Glocer – without referring to it on Tuesday’s results call – probably helped narrow the gulf by announcing a better-than-expected fourth quarter for the markets division. If UK-based investors were expecting the financial data operations to take a heavy hit from the financial crisis (as they did when markets turned down earlier this decade), the division’s resilience should improve sentiment towards the London shares. Familiarity with the more stable Thomson businesses and satisfaction with the improved savings from integrating the two companies are only increasing.
“But it may take more than good housekeeping by Mr Glocer and his team to bridge the Atlantic. The controlling Thomson family has the tools for this job. Its investment vehicle, Woodbridge, has already in effect ‘bought’ UK stock with Canadian paper. Those operations could, and probably should, be restarted...
“Thomson and Reuters deserve credit for not abolishing the London listing at the time of the merger. That would have put UK investors’ noses out of joint. But some 60 per cent of the UK shares are now held by North American investors, who rightly figure that what looks good for Woodbridge is probably good for them. British investors are at liberty to buy back into the group on fundamentals if they wish to benefit from the relative re-rating. But if the UK share of the London listing drops below 20 per cent, they should expect to lose it.
● SOURCE Reuters | Financial Times | The Daily Telegraph
The company also said it expected its underlying operating margin this year to be comparable to 2008, supported by revenue growth and higher savings from integration.
"I think the good thing is that we're giving outlook at all. I've seen so many companies with supposedly decent visibility into their business this year pull back and say, 'Well it's too hard,'" chief executive Tom Glocer said in an interview with Reuters.
Thomson Reuters reported 2008 Q4 net income of $656 million, or 79 cents a share, compared with $432 million, or 67 cents a share, a year earlier.
Profit from ongoing businesses, excluding special items, was 57 cents per share, beating the average analyst forecast of 39 cents.
Revenue in the company's closely watched markets division, which serves financial institutions, fell two per cent to $1.9 billion. Overall revenue was flat at $3.4 billion.
"I think it's going to continue to do better than people expect," Glocer said, referring to the markets division.
"It is hard to see anything else outside the doom and gloom in the two financial and media capitals," he said. "It's going to be a tough year, but when you put it all together, we still think the company will be able to show growth."
The professional division, which sells databases and other information to lawyers, accountants, scientists and the healthcare industry, reported revenue of $1.5 billion in Q4, up three per cent. The rise came in part from online, software and services revenue growth of 10 per cent.
The board has approved an increase in the dividend by four cents per share on an annualised basis. The quarterly dividend payable on March 26 is 28 cents per share.
Thomson Reuters raised its forecast for annualised cost savings from the merger to $1 billion by the end of 2011, up from $750 million projected in May 2008.
The integration plan does not include any new rounds of layoffs, Glocer said.
Pressed to comment on the rate of cancellations seen so far this year, Glocer said: "The one thing I can guarantee is there will be cancellations and there will be new recurring subscription sales, and actually the year isn't off badly on that score.”
Glocer attributed the results to Thomson's basic business model, providing "must-have" information to people who are willing to pay for it. "This is not a luxury good or discretionary purchase," he said during a conference call. "This is must-have information that our customers need to run their businesses."
Glocer also said the integration of Thomson and Reuters was moving more quickly than expected, helping to cut costs.
The Financial Times said concern over the outlook for financial services still drives investors’ perception of the stock, and helps explain the wide variation in perceptions of the company in Toronto, where professional assets such as WestLaw are better known, and London, where City sentiment pervades investors’ views of the company.
“The London listing was trading at a 15 per cent discount to the North American quotes on Tuesday morning, but Mr Glocer expressed no urgency about resolving this by ending the dual-listed company structure,” the FT said.
“This is one we haven’t had to spend any time on,” he said. “Either people will buy in [to the growth story] locally [in London] and it solves itself or the shareholder register turns more North American and it solves itself.”
His message, instead, was that Thomson Reuters can stand out from much of the sector in which its shares are categorised. “We can invest at a time when a lot of pure media companies are cutting back,” he said.
“Asked by one of his own reporters whether such investment might include an interest in one of the newspaper companies whose valuations have suffered dramatically, Mr Glocer was clear that he had little appetite for consumer media,” the FT said.
In theory, the $1.8 billion of free cashflow reported by last year would be enough to buy The New York Times, the FT said, but Glocer cautioned: “I’m not convinced we know how to run a newspaper any better than the ones who are running them today, and boy it looks a tough struggle.”
Glocer said the company was on course to see revenues rise next year, driven by forecast growth in Asia, the Gulf and Latin America.
"We're definitely going to be prioritising markets where there's strong growth," he said. "Tactically, it's easier to push on an open door than slam against one."
The £8.7 billion merger of Thomson and Reuters was expected to produce cost-savings of $750 million but the company said annualised benefits would now be closer to $1 billion from 2011.
"Our markets division is entirely a legitimate concern given what we've seen at companies like RBS, Lloyds and Citi," Glocer said. "But what analysts don't appreciate when they're at the heart of the financial crisis in London or New York, is that in many markets around the world - in Asia, the Gulf and Latin America - there is less gloom."
Thomson Reuters shares closed 11.56 per cent higher in New York, 11.47 per cent higher in Toronto, 10.39 per cent higher on NASDAQ and 6.58 per cent higher in London.
The FT said the persistence of a yawning gap between the group’s North American and London-listed shares is embarrassing.
“The 18 per cent discount at which the London listing trades to the US and Canadian listings is an operational irrelevance. Mr Glocer – without referring to it on Tuesday’s results call – probably helped narrow the gulf by announcing a better-than-expected fourth quarter for the markets division. If UK-based investors were expecting the financial data operations to take a heavy hit from the financial crisis (as they did when markets turned down earlier this decade), the division’s resilience should improve sentiment towards the London shares. Familiarity with the more stable Thomson businesses and satisfaction with the improved savings from integrating the two companies are only increasing.
“But it may take more than good housekeeping by Mr Glocer and his team to bridge the Atlantic. The controlling Thomson family has the tools for this job. Its investment vehicle, Woodbridge, has already in effect ‘bought’ UK stock with Canadian paper. Those operations could, and probably should, be restarted...
“Thomson and Reuters deserve credit for not abolishing the London listing at the time of the merger. That would have put UK investors’ noses out of joint. But some 60 per cent of the UK shares are now held by North American investors, who rightly figure that what looks good for Woodbridge is probably good for them. British investors are at liberty to buy back into the group on fundamentals if they wish to benefit from the relative re-rating. But if the UK share of the London listing drops below 20 per cent, they should expect to lose it.
● SOURCE Reuters | Financial Times | The Daily Telegraph
Thomson Reuters may post strong results, say analysts
Friday 16 January 2009
Thomson Reuters is expected to post strong results next month, J.P. Morgan Securities analysts said on Friday, even as they downgraded the London-listed shares to "neutral" from "overweight" on valuation.
The analysts raised their price targets on the London- and New York-listed shares of the group and kept their "neutral" stance on the U.S. stock.
"We continue to like the fundamentals of the company but would look for a better entry price into both stocks," they wrote in a note to clients.
The analysts expect the group to report strong results, with potential cost savings and/or some restructuring charges shifting from 2008 to 2009.
But the key risk to the shares is news about financial industry job losses and the market's potential read-through to organic growth at the group's markets division, they said. The markets division includes the Reuters and Thomson news operations as well as financial data and tools for investment banks and other financial firms.
Chief financial officer Robert Daleo said last week that the group's quarterly and annual revenue growth rate would slow, reflecting the effects of the world financial crisis.
J.P. Morgan analysts, however, said any weakness in the group's markets division revenue will be offset by the relative strength in its professional unit, which represented about 60 per cent of profits. The professional division sells databases and other deep information reservoirs to lawyers, accountants, scientists and the healthcare industry.
Cost savings may also largely cushion any markets revenue decline, the analysts added.
They raised their price target on Thomson Reuters’ London shares to 1,750 pence from 1,500 pence, and on Thomson Reuters Corp shares to $26.60 from $26.30.
● SOURCE Reuters
The analysts raised their price targets on the London- and New York-listed shares of the group and kept their "neutral" stance on the U.S. stock.
"We continue to like the fundamentals of the company but would look for a better entry price into both stocks," they wrote in a note to clients.
The analysts expect the group to report strong results, with potential cost savings and/or some restructuring charges shifting from 2008 to 2009.
But the key risk to the shares is news about financial industry job losses and the market's potential read-through to organic growth at the group's markets division, they said. The markets division includes the Reuters and Thomson news operations as well as financial data and tools for investment banks and other financial firms.
Chief financial officer Robert Daleo said last week that the group's quarterly and annual revenue growth rate would slow, reflecting the effects of the world financial crisis.
J.P. Morgan analysts, however, said any weakness in the group's markets division revenue will be offset by the relative strength in its professional unit, which represented about 60 per cent of profits. The professional division sells databases and other deep information reservoirs to lawyers, accountants, scientists and the healthcare industry.
Cost savings may also largely cushion any markets revenue decline, the analysts added.
They raised their price target on Thomson Reuters’ London shares to 1,750 pence from 1,500 pence, and on Thomson Reuters Corp shares to $26.60 from $26.30.
● SOURCE Reuters
Thomson Reuters looks abroad to make up for Wall Street
Thursday 08 January 2009
Thomson Reuters is facing a “significant reduction” in US business after the collapse of several Wall Street financial institutions, chief financial officer Robert Daleo said on Thursday. But the company is making up for it by focusing on clients abroad.
“We have seen a significant reduction and lost business as a result of Bear Sterns and cutbacks in other areas, but many of our large accounts continue to hold up fairly well,” Daleo said at a media and telecommunications conference in Phoenix, Arizona.
He said Thomson Reuters’ Top 25 accounts (also known as “focus group accounts”) represent about 13 per cent of revenues. However, an internal shift in perspective has helped soften the financial impact of some of the firms closing their doors.
“We have seen, all year long, declines in sales to the focus group accounts, but we have been able to offset those with good performance in other areas,” he said.
“We have continued through the first nine months to see strong performance in places like the Middle East, Asia, and certain segments of Europe.”
Daleo declined to provide Q4 or 2009 forecasts. “We remain very encouraged by the continued performance of the business across all of our units, and I’ll leave it at that,” he said.
Daleo said Thomson Reuters has about $8 billion in debt with an average maturity of about six and a quarter years and a 5.5 per cent interest rate. It has also paid off debt from Reuters.
“We really don’t have to go back into the debt markets to refinance our long-term debt in 2009,” he said. In addition, the company has a credit facility of $2.5 billion which he said was “totally untapped”.
Daleo also spoke about the difference between Thomson Reuters share prices in London and Toronto. The London shares trade at a discount of nearly 30 per cent to the Toronto shares and the company has been unable to close the gap.
“We’re prepared to invest the time and energy and effort with our UK investors to help them understand the dynamics of the business,” he said.
The London shares closed down two per cent at 1,458 pence. The Toronto shares closed 5.63 per cent at C$31.99.
● SOURCE The Guardian | The Canadian Press
“We have seen a significant reduction and lost business as a result of Bear Sterns and cutbacks in other areas, but many of our large accounts continue to hold up fairly well,” Daleo said at a media and telecommunications conference in Phoenix, Arizona.
He said Thomson Reuters’ Top 25 accounts (also known as “focus group accounts”) represent about 13 per cent of revenues. However, an internal shift in perspective has helped soften the financial impact of some of the firms closing their doors.
“We have seen, all year long, declines in sales to the focus group accounts, but we have been able to offset those with good performance in other areas,” he said.
“We have continued through the first nine months to see strong performance in places like the Middle East, Asia, and certain segments of Europe.”
Daleo declined to provide Q4 or 2009 forecasts. “We remain very encouraged by the continued performance of the business across all of our units, and I’ll leave it at that,” he said.
Daleo said Thomson Reuters has about $8 billion in debt with an average maturity of about six and a quarter years and a 5.5 per cent interest rate. It has also paid off debt from Reuters.
“We really don’t have to go back into the debt markets to refinance our long-term debt in 2009,” he said. In addition, the company has a credit facility of $2.5 billion which he said was “totally untapped”.
Daleo also spoke about the difference between Thomson Reuters share prices in London and Toronto. The London shares trade at a discount of nearly 30 per cent to the Toronto shares and the company has been unable to close the gap.
“We’re prepared to invest the time and energy and effort with our UK investors to help them understand the dynamics of the business,” he said.
The London shares closed down two per cent at 1,458 pence. The Toronto shares closed 5.63 per cent at C$31.99.
● SOURCE The Guardian | The Canadian Press
Thomson Reuters to issue up to $3 billion in debt
Tuesday 16 December 2008
Thomson Reuters filed with US regulators on Tuesday to issue up to $3 billion of debt over the next 25 months.
It said the proceeds would be used for general corporate purposes and the specific terms of the debt securities would be provided later.
A copy of the filing was also filed with Canadian regulators.
● SOURCE Reuters
It said the proceeds would be used for general corporate purposes and the specific terms of the debt securities would be provided later.
A copy of the filing was also filed with Canadian regulators.
● SOURCE Reuters
Thomson Reuters stock to underperform - analyst
Wednesday 19 November 2008
Thomson Reuters shares are likely to underperform until investors feel that the markets division has bottomed, which may not happen until the first quarter of 2010, UBS analyst Jeffrey Fan told clients on Wednesday.
He maintained his “sell” rating on the stock and $23.50 price target. It closed at $23.77 on the New York Stock Exchange on Tuesday.
Fan said Thomson Reuters is in much better shape to weather retrenchment among investment banks than during 2001-2004 when the sector saw a 10 per cent staff reduction. During that period the markets unit saw an 18 per cent decline in revenues from peak to trough.
This time, Thomson Reuters could take some market share from Bloomberg, given the performance of foreign exchange versus fixed income. But the market environment is arguably worse. An estimated 15 to 20 per cent of the investment banking headcount has already disappeared.
Thomson Reuters’ Q3 results announced on 12 November showed that markets revenues beat consensus estimates, suggesting a modest decline in revenues, Fan said. However, he attributed this strength to transaction revenues driven by volatile foreign exchange and commodity markets, which may not be sustainable. Hence reiteration of his “sell” rating.
Thomson Reuters’ New York-listed shares have fallen more than 40 per cent year-to-date but in Toronto they are down only 27 per cent.
● SOURCE Seeking Alpha
He maintained his “sell” rating on the stock and $23.50 price target. It closed at $23.77 on the New York Stock Exchange on Tuesday.
Fan said Thomson Reuters is in much better shape to weather retrenchment among investment banks than during 2001-2004 when the sector saw a 10 per cent staff reduction. During that period the markets unit saw an 18 per cent decline in revenues from peak to trough.
This time, Thomson Reuters could take some market share from Bloomberg, given the performance of foreign exchange versus fixed income. But the market environment is arguably worse. An estimated 15 to 20 per cent of the investment banking headcount has already disappeared.
Thomson Reuters’ Q3 results announced on 12 November showed that markets revenues beat consensus estimates, suggesting a modest decline in revenues, Fan said. However, he attributed this strength to transaction revenues driven by volatile foreign exchange and commodity markets, which may not be sustainable. Hence reiteration of his “sell” rating.
Thomson Reuters’ New York-listed shares have fallen more than 40 per cent year-to-date but in Toronto they are down only 27 per cent.
● SOURCE Seeking Alpha
TR shares surge on Q3 results news
Thursday 13 November 2008
Thomson Reuters shares soared by up to 12 per cent on Thursday as markets absorbed better than expected third quarter results.
The biggest percentage increase was on the New York Stock Exchange but there were also double-digit gains on NASDAQ and the Toronto Stock Exchange.
Wednesday’s Q3 results included profit at 48 cents per share compared with an average analyst forecast of 34 cents.
Revenues were $3.3 billion, eight per cent higher than a year ago. Underlying operating profit was 17 per cent higher at $676 million.
LONDON: TRIL.L ended 44 pence or 3.91 per cent higher at 1,169 pence. Range: 1,097 pence-1225 pence.
NEW YORK: TRI closed $2.65 higher – 12.02 per cent – at $24.69. Range: $22.51-$24.80.
NASDAQ: TRIN soared $11.92 – 11.54 per cent – to close at $115.25. Range $103.08-$116.50.
TORONTO: TRI.TO finished the day up C$2.93 – 10.71 per cent – at C$30.29. Range: C$27.70-C$30.29.
The biggest percentage increase was on the New York Stock Exchange but there were also double-digit gains on NASDAQ and the Toronto Stock Exchange.
Wednesday’s Q3 results included profit at 48 cents per share compared with an average analyst forecast of 34 cents.
Revenues were $3.3 billion, eight per cent higher than a year ago. Underlying operating profit was 17 per cent higher at $676 million.
LONDON: TRIL.L ended 44 pence or 3.91 per cent higher at 1,169 pence. Range: 1,097 pence-1225 pence.
NEW YORK: TRI closed $2.65 higher – 12.02 per cent – at $24.69. Range: $22.51-$24.80.
NASDAQ: TRIN soared $11.92 – 11.54 per cent – to close at $115.25. Range $103.08-$116.50.
TORONTO: TRI.TO finished the day up C$2.93 – 10.71 per cent – at C$30.29. Range: C$27.70-C$30.29.
Thomson Reuters' Q3 results better than expected
Wednesday 12 November 2008
Thomson Reuters reported stronger than expected third quarter results on Wednesday and said integration was ahead of plan. It affirmed its February forecast for 2008 revenue growth of six to eight per cent.
Gains in the professional division more than offset slowing growth in the markets division.
Q3 net income was $380 million (46 cents per share) compared with $2.97 billion ($4.61 per share) a year ago. Excluding non-recurring items, discontinued operations and others, profit was 48 cents per share, higher than the average analyst forecast of 34 cents.
Revenues were $3.3 billion, eight per cent higher than a year ago. Underlying operating profit was 17 per cent higher at $676 million. Media revenues were five per cent higher at $111 million.
“Our results demonstrate the strength, breadth and balance of our company, as our business continued to perform well in the third quarter and our integration plan began to deliver accelerated early savings,” CEO Tom Glocer said.
"The strong growth and profitability of our large Professional Division highlighted its ability to perform well through the economic cycle, while our Markets Division delivered good results despite extreme conditions in global financial markets.
"We are benefiting from our business model which focuses on achieving leading positions in key professional markets, seeking profitable growth in emerging as well as developed markets and providing our customers with deeply relevant content and services via superior product platforms.
"Our revenue growth rates continue to lead our markets and, coupled with integration savings and cost discipline, will help drive continuing profit growth. Moreover, our ability to translate profits into cash flow, supported by our strong balance sheet and liquidity, should allow us to take advantage of investment opportunities that may result from market disruptions while maintaining a disciplined approach to capital allocation."
Glocer said it was the most “wrenching” period he had seen in his 15 years with the Reuters business.
Some analysts have said Thomson Reuters’ revenue could fall in 2009 due to budget cutbacks and payroll cuts among its financial services industry clients. Reuters reported earlier that financial services firms and their staff are being forced to a new era of austerity.
Financial firms worldwide have slashed more than 130,000 jobs in the current global financial crisis, with thousands more losses expected as banks totter and hedge funds haemorrhage assets.
Wall Street bonuses could fall by 41 per cent in 2009 and in the City of London, the cash bonus pool is forecast to fall by nearly 60 per cent this year.
A separate Reuters report on Wednesday said a number of deals designed to cure the crisis are in danger of unravelling, with losses mounting at banks and economies showing signs of serious deterioration.
Thomson Reuters’ London-traded shares, which have lost about 30 per cent of their value since the 17 April merger, closed 4.55 per cent higher. They gained 2.86 per cent in Toronto, 0.46 per cent in New York, and 1.3 per cent on NASDAQ.
● SOURCE Thomson Reuters
Gains in the professional division more than offset slowing growth in the markets division.
Q3 net income was $380 million (46 cents per share) compared with $2.97 billion ($4.61 per share) a year ago. Excluding non-recurring items, discontinued operations and others, profit was 48 cents per share, higher than the average analyst forecast of 34 cents.
Revenues were $3.3 billion, eight per cent higher than a year ago. Underlying operating profit was 17 per cent higher at $676 million. Media revenues were five per cent higher at $111 million.
“Our results demonstrate the strength, breadth and balance of our company, as our business continued to perform well in the third quarter and our integration plan began to deliver accelerated early savings,” CEO Tom Glocer said.
"The strong growth and profitability of our large Professional Division highlighted its ability to perform well through the economic cycle, while our Markets Division delivered good results despite extreme conditions in global financial markets.
"We are benefiting from our business model which focuses on achieving leading positions in key professional markets, seeking profitable growth in emerging as well as developed markets and providing our customers with deeply relevant content and services via superior product platforms.
"Our revenue growth rates continue to lead our markets and, coupled with integration savings and cost discipline, will help drive continuing profit growth. Moreover, our ability to translate profits into cash flow, supported by our strong balance sheet and liquidity, should allow us to take advantage of investment opportunities that may result from market disruptions while maintaining a disciplined approach to capital allocation."
Glocer said it was the most “wrenching” period he had seen in his 15 years with the Reuters business.
Some analysts have said Thomson Reuters’ revenue could fall in 2009 due to budget cutbacks and payroll cuts among its financial services industry clients. Reuters reported earlier that financial services firms and their staff are being forced to a new era of austerity.
Financial firms worldwide have slashed more than 130,000 jobs in the current global financial crisis, with thousands more losses expected as banks totter and hedge funds haemorrhage assets.
Wall Street bonuses could fall by 41 per cent in 2009 and in the City of London, the cash bonus pool is forecast to fall by nearly 60 per cent this year.
A separate Reuters report on Wednesday said a number of deals designed to cure the crisis are in danger of unravelling, with losses mounting at banks and economies showing signs of serious deterioration.
Thomson Reuters’ London-traded shares, which have lost about 30 per cent of their value since the 17 April merger, closed 4.55 per cent higher. They gained 2.86 per cent in Toronto, 0.46 per cent in New York, and 1.3 per cent on NASDAQ.
● SOURCE Thomson Reuters
Wall Street layoffs to impact Thomson Reuters' results
Monday 10 November 2008
Most eyes on Thomson Reuters’ Q3 results on Wednesday will be on revenue momentum in the markets division, which accounts for about half of total revenues, the National Post said on Monday.
UBS analyst Jeffrey Fan, who rates the stock a sell, is calling for about four per cent organic growth, in line with most estimates. He reiterates his view, however, that the division could see revenue declines of about five per cent for next year, given the time lag between layoffs at investment banks and the impact on the company’s bottom line.
The firm’s markets business is susceptible to downturns in the financial services sector because it depends on banks and insurance firms to buy its data and computer terminals, National Post said.
“Until investors are comfortable that market revenues have reached a trough, we believe [Thomson Reuters] is likely to underperform,” Fan wrote in a note to clients.
The analyst has previously written that he does not expect a share price recovery for Thomson Reuters until at least the middle of next year.
National Post said the company’s stock is down about 30 per cent year to date.
The Associated Press said the July-September results could show some fallout from the financial crisis but much of the effect would not be seen until later quarters because of a lag in data-terminal subscriptions.
“Thomson Reuters will be somewhat insulated from the negative effects either way,” it said. “Its markets division, in which its data-terminal business falls, accounted for only about 35 percent of the company’s profits in the first half of the year. Other businesses, such as professional publications for lawyers and accountants, remain strong.”
AP said analysts polled by the company’s Thomson Reuters service expect, on average, earnings of 34 cents per share on revenue of $3.25 billion.
Looking ahead, it said that in the fourth quarter more fallout was expected from the financial crisis as subscription numbers catch up with the disappearance of major clients.
● SOURCE National Post | Associated Press
The Associated Press said the July-September results could show some fallout from the financial crisis but much of the effect would not be seen until later quarters because of a lag in data-terminal subscriptions.
“Thomson Reuters will be somewhat insulated from the negative effects either way,” it said. “Its markets division, in which its data-terminal business falls, accounted for only about 35 percent of the company’s profits in the first half of the year. Other businesses, such as professional publications for lawyers and accountants, remain strong.”
AP said analysts polled by the company’s Thomson Reuters service expect, on average, earnings of 34 cents per share on revenue of $3.25 billion.
Looking ahead, it said that in the fourth quarter more fallout was expected from the financial crisis as subscription numbers catch up with the disappearance of major clients.
● SOURCE National Post | Associated Press
Thomson Reuters' UK shares dive, broker reiterates ‘sell’
Monday 06 October 2008
Hugh Van Es, the renowned Dutch photographer who took the "helicopter" photo of the evacuation of Saigon, died on May 15. Hugh was a friend to many of the Reuters journalists who passed through Hong Kong and frequented the FCC over the years. A wake was held for him at the FCC in May. But for those who couldn't make it and would like to honour his memory, former FCC VP and Hon Sec Penny Byrne and her husband Tim Heald are organising a VANES INTERNATIONAL WAKE at the Frontline Club in London, the nearest thing to the FCC in the UK.
Date: Friday 9 October
Time: 1900 hours until last person leaves
Address: 13 Norfolk Place, W2 1QJ (very close to Paddington Station)
Tel: 020 7479 8960
Cash bar, cash food.
Angus MacSwan
Date: Friday 9 October
Time: 1900 hours until last person leaves
Address: 13 Norfolk Place, W2 1QJ (very close to Paddington Station)
Tel: 020 7479 8960
Cash bar, cash food.
Angus MacSwan
World crisis will hurt us, Tom Glocer says
Thursday 02 October 2008
Thomson Reuters reaffirmed its full-year outlook on Thursday but Tom Glocer said the world financial crisis will hurt the company as banks lose staff and take out trading and information terminals.
“You’ve got to say this is a negative short to middle term,” the CEO told analysts at a London investor day. But he said the banking consolidation now beginning represents a long-term opportunity.
“There’s a lot of compensating work that needs to be done now to stitch together all these trading operations,” Glocer said.
Thomson Reuters’ markets division is exposed to financial services and contributes 59 per cent of group sales. Glocer said the Thomson Financial legal and health professional business would help the company to weather the storm.
In slides for the presentation the company said it expected revenue growth of 6 to 8 per cent, almost all organic, and an underlying profit margin of 19 to 21 per cent for 2008.
It also reiterated targets to generate free cash flow of 11 to 12 per cent of sales for capital expenditure of 8 to 9 per cent of revenue.
The company said it had completed its refinancing needs for Thomson’s acquisition of Reuters in April through long-term debt offerings in June. It had a $2.5 billion credit facility on which it had not drawn.
Devin Wenig, markets division CEO, said the company’s foreign exchange business had its best month ever in September. But he could not predict how long it would take until conditions for the division as a whole would improve.
“We certainly are not viewing this through rose-coloured glasses. We’ve never seen a market like this. There are parts of our business that are really challenged right now,” he said.
● SOURCE Reuters
“You’ve got to say this is a negative short to middle term,” the CEO told analysts at a London investor day. But he said the banking consolidation now beginning represents a long-term opportunity.
“There’s a lot of compensating work that needs to be done now to stitch together all these trading operations,” Glocer said.
Thomson Reuters’ markets division is exposed to financial services and contributes 59 per cent of group sales. Glocer said the Thomson Financial legal and health professional business would help the company to weather the storm.
In slides for the presentation the company said it expected revenue growth of 6 to 8 per cent, almost all organic, and an underlying profit margin of 19 to 21 per cent for 2008.
It also reiterated targets to generate free cash flow of 11 to 12 per cent of sales for capital expenditure of 8 to 9 per cent of revenue.
The company said it had completed its refinancing needs for Thomson’s acquisition of Reuters in April through long-term debt offerings in June. It had a $2.5 billion credit facility on which it had not drawn.
Devin Wenig, markets division CEO, said the company’s foreign exchange business had its best month ever in September. But he could not predict how long it would take until conditions for the division as a whole would improve.
“We certainly are not viewing this through rose-coloured glasses. We’ve never seen a market like this. There are parts of our business that are really challenged right now,” he said.
● SOURCE Reuters
Markets division revenue ‘to take a hit’
Friday 19 September 2008
Thomson Reuters markets division revenue will likely take a hit from the current financial markets turmoil, at least two analysts said on Friday.
“Given that more financial institutions may still be at risk it seems likely... that Markets revenues will turn negative next year,” analyst Gareth Thomas of Collins Stewart wrote in a note to clients.
Mark Braley of Deutsche Bank noted that 50 per cent of the markets’ revenue are headcount driven and this will now decline faster than previously expected.
He downgraded the stock to “sell” from “buy” and cut his price target to 1,000 pence from 2,400 pence.
“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said.
The markets division includes the news operations as well as financial data and tools for investment banks and other financial firms.
Thomson Reuters shares traded on the London Stock Exchange were 10.63 per cent higher at 1,405 pence at 1230 GMT on Friday.
● SOURCE Reuters
“Given that more financial institutions may still be at risk it seems likely... that Markets revenues will turn negative next year,” analyst Gareth Thomas of Collins Stewart wrote in a note to clients.
Mark Braley of Deutsche Bank noted that 50 per cent of the markets’ revenue are headcount driven and this will now decline faster than previously expected.
He downgraded the stock to “sell” from “buy” and cut his price target to 1,000 pence from 2,400 pence.
“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said.
The markets division includes the news operations as well as financial data and tools for investment banks and other financial firms.
Thomson Reuters shares traded on the London Stock Exchange were 10.63 per cent higher at 1,405 pence at 1230 GMT on Friday.
● SOURCE Reuters
Revenue ‘strongly positive’ - Tom Glocer
Thursday 18 September 2008
Revenue at Thomson Reuters’ markets division has been “strongly positive” through the last week of financial crisis on Wall Street, CEO Tom Glocer said on Thursday.
Sales were “still tracking to positive revenue growth next year” but this week’s turmoil “raises the potential to go negative”, he said at the annual Goldman Sachs Communacopia Conference in New York.
Glocer said the institutions toppled by the financial crisis of recent months accounted for just 1 per cent of Thomson Reuters’ annual revenues.
“This week there has obviously been extraordinary panic, but it’s not like it’s been rosy the past 13 or 14 months,” he said.
Before the “major sea-shift” in financial markets, the group had been on course to record positive revenue growth next year.
If the current crisis were limited to the already known consequences of the collapse of Lehman Brothers, the takeovers of Merrill Lynch and Bear Stearns, and the government bail-outs of AIG, Fannie Mae and Freddie Mac, there was “the potential [for sales growth] to go negative, but the business is resilient enough that we’d have a significant shot at going positive next year”.
The CEO added: “If we’re at the beginning of the 1930s, as some would say, it will be more serious.”
Glocer said it was difficult for him to reconcile the company’s positive performance this far into the credit crisis with his experiences in previous economic and financial downturns.
Thomson Reuters shares rebounded in New York and Toronto, regaining some of the losses caused by the financial market shakeout, but lost further ground in London.
● SOURCE Dow Jones | CNN
Sales were “still tracking to positive revenue growth next year” but this week’s turmoil “raises the potential to go negative”, he said at the annual Goldman Sachs Communacopia Conference in New York.
Glocer said the institutions toppled by the financial crisis of recent months accounted for just 1 per cent of Thomson Reuters’ annual revenues.
“This week there has obviously been extraordinary panic, but it’s not like it’s been rosy the past 13 or 14 months,” he said.
Before the “major sea-shift” in financial markets, the group had been on course to record positive revenue growth next year.
If the current crisis were limited to the already known consequences of the collapse of Lehman Brothers, the takeovers of Merrill Lynch and Bear Stearns, and the government bail-outs of AIG, Fannie Mae and Freddie Mac, there was “the potential [for sales growth] to go negative, but the business is resilient enough that we’d have a significant shot at going positive next year”.
The CEO added: “If we’re at the beginning of the 1930s, as some would say, it will be more serious.”
Glocer said it was difficult for him to reconcile the company’s positive performance this far into the credit crisis with his experiences in previous economic and financial downturns.
Thomson Reuters shares rebounded in New York and Toronto, regaining some of the losses caused by the financial market shakeout, but lost further ground in London.
● SOURCE Dow Jones | CNN
Shares hit by US banking crisis
Monday 15 September 2008
Thomson Reuters shares fell rapidly in London on Monday in an immediate response to the US banking crisis. At mid-morning the shares were down 120 pence to 1,399 pence – a fall of nearly 8 per cent – on the expectation that the company will see sales of its financial news and trading terminals plummet as its banking clients collapse or merge.
The FTSE-100 index of leading shares was down 1.89 per cent at 5,218.10.
Lehman Brothers filed for Chapter 11 bankruptcy protection, making it the largest and highest-profile casualty of the global credit crisis. The 158-year-old investment bank is one of the biggest financial services firms to collapse since 1990 when Drexel Burnham Lambert filed for bankruptcy protection.
Merrill Lynch agreed to sell itself to Bank of America for about $50 billion to avert the deepening crisis.
Financial institutions worldwide have recorded writedowns and credit losses of more than $500 billion as the US sub-prime mortgage crisis has spread to other markets.
The FTSE-100 index of leading shares was down 1.89 per cent at 5,218.10.
Lehman Brothers filed for Chapter 11 bankruptcy protection, making it the largest and highest-profile casualty of the global credit crisis. The 158-year-old investment bank is one of the biggest financial services firms to collapse since 1990 when Drexel Burnham Lambert filed for bankruptcy protection.
Merrill Lynch agreed to sell itself to Bank of America for about $50 billion to avert the deepening crisis.
Financial institutions worldwide have recorded writedowns and credit losses of more than $500 billion as the US sub-prime mortgage crisis has spread to other markets.
Thomson Reuters shares take beating
Monday 15 September 2008
Thomson Reuters took a beating in London, New York and Toronto on Monday in immediate negative fallout from the US credit crisis.
On the London Stock Exchange, the shares closed at 1,400 pence, a drop on the day of 7.84 per cent.
The losses were worse in North America where there were falls of more than 10 per cent.
In New York, the stock lost 10.93 per cent of its value to close at $29.41 on the New York Stock Exchange and 10.43 per cent to $146.73 on NASDAQ.
On the Toronto Stock Exchange, Thomson Reuters tumbled to C$31.25, down 10.59 per cent.
Canada’s National Post said that with bankrupt Lehman Brothers accounting for an estimated 1 per cent of Thomson Reuters’ revenues, assuming most of this is lost, it means a 3 per cent downgrade to the company’s 2009 earnings per share (EPS).
Merrill Lynch, which agreed to sell itself to Bank of America for about $50 billion, likely has a similar amount to Lehman, UBS Securities said in a report.
“Given the lag factor between job cuts and cancellations, we believe the brunt of the investment banking downturn is likely to be felt from Q4 2008 onwards and ongoing investment banking consolidation will weigh on sentiment,” UBS analyst Jeffrey Fan told clients.
During the 2002-2004 downturn, Thomson’s Markets business lost 18 per cent of its revenues from peak to trough, he said. While things are different this time, Fan sees substantial downside risks to conservative assumptions of flat Markets growth in 2009 and 2010.
The analyst said that with Thomson Reuters already trading at a premium of 17 times 2009 estimated EPS, the additional downside risk to earnings makes the risk reward “unattractive”. He continues to rate the shares a “sell” with a $28 price target.
Don Vialoux, a Canadian chartered market technician, said Thomson Reuters currently has a negative technical profile. Intermediate trend is down. The stock trades below its 200-day moving average and on Monday morning broke below support at C$33.75 and its 50-day moving average. Support exists at C$27.51, he added.
● SOURCE National Post
On the London Stock Exchange, the shares closed at 1,400 pence, a drop on the day of 7.84 per cent.
The losses were worse in North America where there were falls of more than 10 per cent.
In New York, the stock lost 10.93 per cent of its value to close at $29.41 on the New York Stock Exchange and 10.43 per cent to $146.73 on NASDAQ.
On the Toronto Stock Exchange, Thomson Reuters tumbled to C$31.25, down 10.59 per cent.
Canada’s National Post said that with bankrupt Lehman Brothers accounting for an estimated 1 per cent of Thomson Reuters’ revenues, assuming most of this is lost, it means a 3 per cent downgrade to the company’s 2009 earnings per share (EPS).
Merrill Lynch, which agreed to sell itself to Bank of America for about $50 billion, likely has a similar amount to Lehman, UBS Securities said in a report.
“Given the lag factor between job cuts and cancellations, we believe the brunt of the investment banking downturn is likely to be felt from Q4 2008 onwards and ongoing investment banking consolidation will weigh on sentiment,” UBS analyst Jeffrey Fan told clients.
During the 2002-2004 downturn, Thomson’s Markets business lost 18 per cent of its revenues from peak to trough, he said. While things are different this time, Fan sees substantial downside risks to conservative assumptions of flat Markets growth in 2009 and 2010.
The analyst said that with Thomson Reuters already trading at a premium of 17 times 2009 estimated EPS, the additional downside risk to earnings makes the risk reward “unattractive”. He continues to rate the shares a “sell” with a $28 price target.
Don Vialoux, a Canadian chartered market technician, said Thomson Reuters currently has a negative technical profile. Intermediate trend is down. The stock trades below its 200-day moving average and on Monday morning broke below support at C$33.75 and its 50-day moving average. Support exists at C$27.51, he added.
● SOURCE National Post
Q2 revenue growth slows, shares fall
Tuesday 12 August 2008
Thomson Reuters, reporting combined results for the first time, said revenue growth in its key markets division, which includes news operations, was slower in the second quarter as the US credit crisis took a heavy toll on global investment banks.
It affirmed its full-year forecasts given in May, citing resilience in the Professional division, which sells databases and tools to accountants, lawyers, tax, health and other professionals.
But the London shares, which had gained 13 per cent since the beginning of August, fell 8 per cent before recovering some of the day’s loss. Analysts have said the real test will come late in the year when customers set their 2009 budgets.
“The results were not great,” Reuters itself quoted London derivatives trader Manoj Ladwa as saying. “The market was pricing in half-decent figures and that’s what it got.”
Q2 pro forma revenue rose 11 per cent from a year earlier to $3.4 billion, compared with a 12 per cent increase to $3.3 billion in the first quarter.
The company said markets revenue growth was driven by strength in sales and trading, investment and advisory, and enterprise businesses, particularly in Asia.
“We are encouraged by the robust revenue growth which we achieved despite the backdrop of a challenging economic environment,” CEO Tom Glocer said. This environment was likely to last at least until the end of the year.
Thomson Reuters said pro forma underlying profit – excluding amortization and other items – rose 15 per cent to $708 million.
The company said it completed its $500 million share buyback programme in July, less than three months after announcing it, and that it would repurchase shares from time to time in the future.
The stock fell as much as 8 per cent before recovering to 1,481 pence, nearly 5 per cent lower, in London. On the Toronto Stock Exchange the share fell 4.1 per cent before recovering slightly.
● SOURCE Reuters
It affirmed its full-year forecasts given in May, citing resilience in the Professional division, which sells databases and tools to accountants, lawyers, tax, health and other professionals.
But the London shares, which had gained 13 per cent since the beginning of August, fell 8 per cent before recovering some of the day’s loss. Analysts have said the real test will come late in the year when customers set their 2009 budgets.
“The results were not great,” Reuters itself quoted London derivatives trader Manoj Ladwa as saying. “The market was pricing in half-decent figures and that’s what it got.”
Q2 pro forma revenue rose 11 per cent from a year earlier to $3.4 billion, compared with a 12 per cent increase to $3.3 billion in the first quarter.
The company said markets revenue growth was driven by strength in sales and trading, investment and advisory, and enterprise businesses, particularly in Asia.
“We are encouraged by the robust revenue growth which we achieved despite the backdrop of a challenging economic environment,” CEO Tom Glocer said. This environment was likely to last at least until the end of the year.
Thomson Reuters said pro forma underlying profit – excluding amortization and other items – rose 15 per cent to $708 million.
The company said it completed its $500 million share buyback programme in July, less than three months after announcing it, and that it would repurchase shares from time to time in the future.
The stock fell as much as 8 per cent before recovering to 1,481 pence, nearly 5 per cent lower, in London. On the Toronto Stock Exchange the share fell 4.1 per cent before recovering slightly.
● SOURCE Reuters
Thomson Reuters ‘may struggle’
Monday 11 August 2008
Thomson Reuters is wasting no time integrating the two merged companies’ staff and legacy products, but despite potential economies of scale and product rationalisation it may struggle in today’s financial markets climate, Dow Jones Financial News Online said.
The balance sheets of financial services corporations are bleeding red ink due to massive writedowns on credit derivatives and mortgage instruments, and companies have laid off tens of thousands of employees this year.
“This means fewer traders needing access to Bloomberg or Thomson Reuters screens,” it said.
Robert Iati, partner and head of global consulting at Tabb Group, said data vendors fare poorly when the financial industry goes into cost-cutting mode. More ominously, financial services firms have been cutting data aggregators in favour of direct market feeds to avoid latency or trading delays. “This is not good for the status quo, but it does give them every reason to improve their own products,” Iati said.
Because of its more diverse client base, Thomson Reuters as a merged entity argues it may be better suited to seeing off a downward economic cycle than if each firm was on its own.
Debra Walton, global head of market development, said: “Clearly anyone in financial markets has an eye on the state of the market and the economy. We feel much more comfortable about our ability to be able to deal successfully with the economy now that the merger has taken place.”
Adam Honoré, senior analyst with consultancy Aite Group, agreed that the merger might help them weather the storm. He said: “The Thomson institutional-type business has hardly hiccupped, but for the traditional Reuters business the number of terminals is definitely declining.”
● SOURCE Financial News Online
The balance sheets of financial services corporations are bleeding red ink due to massive writedowns on credit derivatives and mortgage instruments, and companies have laid off tens of thousands of employees this year.
“This means fewer traders needing access to Bloomberg or Thomson Reuters screens,” it said.
Robert Iati, partner and head of global consulting at Tabb Group, said data vendors fare poorly when the financial industry goes into cost-cutting mode. More ominously, financial services firms have been cutting data aggregators in favour of direct market feeds to avoid latency or trading delays. “This is not good for the status quo, but it does give them every reason to improve their own products,” Iati said.
Because of its more diverse client base, Thomson Reuters as a merged entity argues it may be better suited to seeing off a downward economic cycle than if each firm was on its own.
Debra Walton, global head of market development, said: “Clearly anyone in financial markets has an eye on the state of the market and the economy. We feel much more comfortable about our ability to be able to deal successfully with the economy now that the merger has taken place.”
Adam Honoré, senior analyst with consultancy Aite Group, agreed that the merger might help them weather the storm. He said: “The Thomson institutional-type business has hardly hiccupped, but for the traditional Reuters business the number of terminals is definitely declining.”
● SOURCE Financial News Online
Q2 results: focus on two-year outlook
Wednesday 06 August 2008
Thomson Reuters looks poised to deliver second quarter results on Tuesday just above expectations, but investors should focus on the outlook over the next two years, UBS analyst Jeffrey Fan says.
Reuters’ revenue fell 17 per cent during the bear market in 2002, and while Fan believes the company will fare better this time around, he sees considerable downside risk to consensus estimates of flat revenue growth over the next two years, Financial Post of Toronto reported in a blog posting under the headline ‘Thomson Reuters vulnerable to economic slowdown’.
The company’s markets business is susceptible to downturns in the financial services sector because it depends on banks and insurance firms to buy the data and equipment it produces.
“If consensus estimates hold, then [Thomson Reuters] still trades on a premium to its peers,” Fan wrote in a note to clients on Wednesday.
The analyst’s worst case scenario is a 50 per cent drop in earnings per share next year if the company suffers on the same level it did in the last downturn. He has a “sell” rating on the stock.
Financial Post said that of the analysts Bloomberg lists covering Thomson Reuters stock, nine have “buy” recommendations, five have “hold” and four “sell”.
● SOURCE Financial Post
Reuters’ revenue fell 17 per cent during the bear market in 2002, and while Fan believes the company will fare better this time around, he sees considerable downside risk to consensus estimates of flat revenue growth over the next two years, Financial Post of Toronto reported in a blog posting under the headline ‘Thomson Reuters vulnerable to economic slowdown’.
The company’s markets business is susceptible to downturns in the financial services sector because it depends on banks and insurance firms to buy the data and equipment it produces.
“If consensus estimates hold, then [Thomson Reuters] still trades on a premium to its peers,” Fan wrote in a note to clients on Wednesday.
The analyst’s worst case scenario is a 50 per cent drop in earnings per share next year if the company suffers on the same level it did in the last downturn. He has a “sell” rating on the stock.
Financial Post said that of the analysts Bloomberg lists covering Thomson Reuters stock, nine have “buy” recommendations, five have “hold” and four “sell”.
● SOURCE Financial Post
Tom Glocer to appear on Q2 results webcast
Tuesday 22 July 2008
Thomson Reuters said it will report its second quarter 2008 results on 12 August. CEO Tom Glocer will appear in a live webcast on that day at 10:00 am EDT/3:00 pm BST. Executive vice president and CFO Robert Daleo will also appear.
To view the webcast go to ● www.thomsonreuters.com, click on Investor Relations and then News & Events. It will be archived for those who miss the live cast.
● SOURCE Thomson Reuters
To view the webcast go to ● www.thomsonreuters.com, click on Investor Relations and then News & Events. It will be archived for those who miss the live cast.
● SOURCE Thomson Reuters
Downturn is Tom Glocer’s ‘first real test’
Sunday 29 June 2008
Tom Glocer faces his first real test as CEO of Thomson Reuters in the downturn in investment banking, The Sunday Times said.
The downturn is undoubtedly coming – but it doesn’t have to be as bad as last time round, the UK newspaper said.
“That, at least, is the mantra from the newly minted Thomson Reuters,” it said.
“After boarding a plane back to his native New York, from where he will run the company, Tom Glocer now faces his first real test. Thomson still believes it can grow revenues at its financial-markets division during 2009, although most analysts are much less bullish.
“Of course, the new Thomson was created by Glocer so that such a challenge wouldn’t matter as much as it used to. After six years at the helm of Reuters, getting it shipshape after Peter Job’s regime, he concluded that the best place for a company exposed to such a volatile sector as global finance was within another one. His verdict sounded eminently sensible.”
As part of Thomson, markets – which contains the old Reuters business – account for roughly 60 per cent of revenues and 40 per cent of operating profits. Smoothing it out is the more profitable legal, accounting and science information arm.
Thomson has some enviable assets with great defensive qualities. However, it is hard to divert attention from its financial-sector exposure, particularly as most of the £375 million merger cost savings will be squeezed from that division, The Sunday Times said.
“In this gloomy light, it looks as if Glocer has created a cyclical publisher, not a more resilient financial-markets supplier. It is no coincidence that Thomson’s closest rival in professional publishing, Reed Elsevier, is attempting to offload its business publishing arm – the last division keenly exposed to the economic cycle. In these markets, even that auction is unlikely to be hurried.
“Inroads on China and India leave Glocer thinking he is better placed than during the last downturn. In 2002 and 2003, when Reuters’ recurring revenues dropped by 4% and 10% respectively, foreign exchange and commodities were under pressure. This time it is the narrower markets of fixed income and credit that are under the cosh.”
However, the newspaper said it is impossible not to see the impact of the crunch spreading into other departments. Worst-case forecasts suggest 80,000 financial jobs could go globally in the next 18 months. Broker Collins Stewart believes that, despite a push for company-wide enterprise supply deals, 20 per cent of Thomson’s group revenues come from traders’ terminal sales in the United States and western Europe, which are vulnerable when jobs are being cut.
The Sunday Times added that Thomson Reuters shares in London have tumbled 16 per cent since their debut in April, opening up a valuation gap with the more expensive and less liquid stock trading in Toronto.
“A £250m share-buyback programme has been holding them back from greater falls here, but that is due to finish this week, suggesting they will drift further, even though Thomson is forecasting a healthy 6%-8% topline growth across the group this year.”
● SOURCE The Sunday Times
The downturn is undoubtedly coming – but it doesn’t have to be as bad as last time round, the UK newspaper said.
“That, at least, is the mantra from the newly minted Thomson Reuters,” it said.
“After boarding a plane back to his native New York, from where he will run the company, Tom Glocer now faces his first real test. Thomson still believes it can grow revenues at its financial-markets division during 2009, although most analysts are much less bullish.
“Of course, the new Thomson was created by Glocer so that such a challenge wouldn’t matter as much as it used to. After six years at the helm of Reuters, getting it shipshape after Peter Job’s regime, he concluded that the best place for a company exposed to such a volatile sector as global finance was within another one. His verdict sounded eminently sensible.”
As part of Thomson, markets – which contains the old Reuters business – account for roughly 60 per cent of revenues and 40 per cent of operating profits. Smoothing it out is the more profitable legal, accounting and science information arm.
Thomson has some enviable assets with great defensive qualities. However, it is hard to divert attention from its financial-sector exposure, particularly as most of the £375 million merger cost savings will be squeezed from that division, The Sunday Times said.
“In this gloomy light, it looks as if Glocer has created a cyclical publisher, not a more resilient financial-markets supplier. It is no coincidence that Thomson’s closest rival in professional publishing, Reed Elsevier, is attempting to offload its business publishing arm – the last division keenly exposed to the economic cycle. In these markets, even that auction is unlikely to be hurried.
“Inroads on China and India leave Glocer thinking he is better placed than during the last downturn. In 2002 and 2003, when Reuters’ recurring revenues dropped by 4% and 10% respectively, foreign exchange and commodities were under pressure. This time it is the narrower markets of fixed income and credit that are under the cosh.”
However, the newspaper said it is impossible not to see the impact of the crunch spreading into other departments. Worst-case forecasts suggest 80,000 financial jobs could go globally in the next 18 months. Broker Collins Stewart believes that, despite a push for company-wide enterprise supply deals, 20 per cent of Thomson’s group revenues come from traders’ terminal sales in the United States and western Europe, which are vulnerable when jobs are being cut.
The Sunday Times added that Thomson Reuters shares in London have tumbled 16 per cent since their debut in April, opening up a valuation gap with the more expensive and less liquid stock trading in Toronto.
“A £250m share-buyback programme has been holding them back from greater falls here, but that is due to finish this week, suggesting they will drift further, even though Thomson is forecasting a healthy 6%-8% topline growth across the group this year.”
● SOURCE The Sunday Times
Thomson Reuters leads FTSE retreat
Thursday 26 June 2008
Thomson Reuters was among shares leading a retreat on the London Stock Exchange on Thursday and ended down more than 5 per cent to a post-merger low.
At mid-day the stock was at 1,366 pence, some 73 pence or 5.07 per cent lower. The FTSE-100 was down 1.2 per cent at 5,602.90.
At the close, Thomson Reuters had lost 5.6 per cent to 1,359 pence, a loss of 80 pence on the day.
On their first day of trading, 17 April, Thomson Reuters ended at 1,560 pence.
Investment bank Morgan Stanley reduced its price estimate by 9.9 per cent to 1,280 pence from 1,420 pence and maintained its “underweight” recommendation on the share.
It said it expects revenue in the financial division to fall by 2.8 per cent in 2009 as banks cut jobs and try to cut down on their market data costs.
“We expect quarterly revenue growth to slow rapidly in the second half of 2008 and to go negative in the first quarter of 2009,” it said in a research note.
“Our negative growth forecast is predicted on the ongoing retrenchment in investment bank headcount and market data spend,” London-based analyst Patrick Wellington wrote.
He added: “Management does not believe that Reuters revenues will show negative growth in 2009 despite the experience of 2002 and 2003, when recurring revenues dropped by 4 per cent and 10 per cent as investment banking markets were impacted by the fall-away post the internet boom.”
● SOURCE Bloomberg | Reuters | Financial Times
At mid-day the stock
At the close, Thomson Reuters had lost 5.6 per cent to 1,359 pence, a loss of 80 pence on the day.
On their first day of trading, 17 April, Thomson Reuters ended at 1,560 pence.
Investment bank Morgan Stanley reduced its price estimate by 9.9 per cent to 1,280 pence from 1,420 pence and maintained its “underweight” recommendation on the share.
It said it expects revenue in the financial division to fall by 2.8 per cent in 2009 as banks cut jobs and try to cut down on their market data costs.
“We expect quarterly revenue growth to slow rapidly in the second half of 2008 and to go negative in the first quarter of 2009,” it said in a research note.
“Our negative growth forecast is predicted on the ongoing retrenchment in investment bank headcount and market data spend,” London-based analyst Patrick Wellington wrote.
He added: “Management does not believe that Reuters revenues will show negative growth in 2009 despite the experience of 2002 and 2003, when recurring revenues dropped by 4 per cent and 10 per cent as investment banking markets were impacted by the fall-away post the internet boom.”
● SOURCE Bloomberg | Reuters | Financial Times
Company to raise C$1.2 billion
Thursday 19 June 2008
Thomson Reuters said it has signed a deal to raise C$1.2 billion in two note offerings that will be used to repay part of its debt.
The offerings include C$600 million of 5.25 per cent notes due in 2011 and a further C$600 million of 5.7 per cent notes due in 2015.
The company said it plans to use the money to repay bank debt used by the former Thomson Corp to repay the cash portion of its cash and stock acquisition of Reuters.
Moody's Investors Service assigned a ‘Baa1’ rating to the two notes.
Fitch Ratings assigned an ‘A-’ rating.
Thomson Reuters currently has about US$3.4 billion of borrowings under its bridge credit facility related to the deal.
The financing followed another one announced on Tuesday for US$1.75 billion through an issue of corporate bonds.
● SOURCE Canadian Press
The offerings include C$600 million of 5.25 per cent notes due in 2011 and a further C$600 million of 5.7 per cent notes due in 2015.
The company said it plans to use the money to repay bank debt used by the former Thomson Corp to repay the cash portion of its cash and stock acquisition of Reuters.
Moody's Investors Service assigned a ‘Baa1’ rating to the two notes.
Fitch Ratings assigned an ‘A-’ rating.
Thomson Reuters currently has about US$3.4 billion of borrowings under its bridge credit facility related to the deal.
The financing followed another one announced on Tuesday for US$1.75 billion through an issue of corporate bonds.
● SOURCE Canadian Press
Thomson Reuters to raise $1.75 billion
Tuesday 17 June 2008
Thomson Reuters said it plans to raise $1.75 billion through an issue of corporate securities.
The offer is for $750 million of bonds due in 2013 paying an annual interest rate of 5.95 per cent and $1 billion in 6.5 per cent bonds due in 2018. The offer closes on Friday.
The company plans to use the money to repay bank debt used by the former Thomson Corp to pay the cash portion of its cash-and-stock acquisition of Reuters on 17 April.
The deal was worth about $15.8 billion.
● SOURCE CNN
The offer is for $750 million of bonds due in 2013 paying an annual interest rate of 5.95 per cent and $1 billion in 6.5 per cent bonds due in 2018. The offer closes on Friday.
The company plans to use the money to repay bank debt used by the former Thomson Corp to pay the cash portion of its cash-and-stock acquisition of Reuters on 17 April.
The deal was worth about $15.8 billion.
● SOURCE CNN
Integration, takeover concerns cited
Wednesday 04 June 2008
Citing integration risks and concerns about a takeover, US credit ratings agency Fitch Ratings gave Thomson Reuters a mid-level investment-grade rating.
Fitch said the newly-merged company has a sound balance sheet and gave it an initial A- rating. Ratings indicate a company’s ability to repay debt. The highest rating is AAA.
Fitch said its rating reflects the company’s ability to generate meaningful cash flow which will allow it to meet repayment schedules. It is also based on Thomson Reuters’ relative lack of viable competitors and the company’s ability to distribute news and other information electronically.
Some concerns include integration risk and the possibility that the new company could be an acquisition target, Fitch said.
● SOURCE CNN
Fitch said the newly-merged company has a sound balance sheet and gave it an initial A- rating. Ratings indicate a company’s ability to repay debt. The highest rating is AAA.
Fitch said its rating reflects the company’s ability to generate meaningful cash flow which will allow it to meet repayment schedules. It is also based on Thomson Reuters’ relative lack of viable competitors and the company’s ability to distribute news and other information electronically.
Some concerns include integration risk and the possibility that the new company could be an acquisition target, Fitch said.
● SOURCE CNN
Q1 revenue up 12% to $3.3 billion
Thursday 01 May 2008
Thomson Reuters, reporting its maiden Q1 results, said total revenue rose by 12 per cent from the previous year to roughly $3.3 billion – assuming Thomson and Reuters had existed as a joint company.
Thomson contributed about $1.8 billion to the total – a 10 per cent increase – and Reuters $1.4 billion – 13 per cent higher than Q1 2007.
The company, whose merger was completed on 17 April, said it expects 2008 pro forma revenue growth of 6 to 8 per cent.
“Our combined first quarter results and guidance for the full year reflect the robustness of our business, even in turbulent markets,” said Tom Glocer, CEO.
“Our Markets Division holds leading positions in higher growth segments of the financial markets, including foreign exchange, commodities, energy and emerging markets. Our leading positions in the less cyclical Professional markets of legal, tax and accounting, scientific and healthcare information also grew strongly in the quarter.
“These are high quality businesses with attractive profit margins and strong cash flow characteristics.”
He added: “Thomson Reuters is extremely well-positioned to capitalise on the growing demand across the world’s business and professional communities for intelligent information – insightful, high value content that can be used by human beings and machines. As an enlarged global business, Thomson Reuters will now also benefit from the value created by more diversified revenue streams, a larger capital base and synergies resulting from the combination of our businesses.”
The first Thomson Reuters dividend of $0.22253 per share will be paid on 15 September to shareholders of record as of 21 August. A quarterly dividend of $0.27 per share will be paid in December.
● SOURCE Thomson Reuters
Thomson contributed about $1.8 billion to the total – a 10 per cent increase – and Reuters $1.4 billion – 13 per cent higher than Q1 2007.
The company, whose merger was completed on 17 April, said it expects 2008 pro forma revenue growth of 6 to 8 per cent.
“Our combined first quarter results and guidance for the full year reflect the robustness of our business, even in turbulent markets,” said Tom Glocer, CEO.
“Our Markets Division holds leading positions in higher growth segments of the financial markets, including foreign exchange, commodities, energy and emerging markets. Our leading positions in the less cyclical Professional markets of legal, tax and accounting, scientific and healthcare information also grew strongly in the quarter.
“These are high quality businesses with attractive profit margins and strong cash flow characteristics.”
He added: “Thomson Reuters is extremely well-positioned to capitalise on the growing demand across the world’s business and professional communities for intelligent information – insightful, high value content that can be used by human beings and machines. As an enlarged global business, Thomson Reuters will now also benefit from the value created by more diversified revenue streams, a larger capital base and synergies resulting from the combination of our businesses.”
The first Thomson Reuters dividend of $0.22253 per share will be paid on 15 September to shareholders of record as of 21 August. A quarterly dividend of $0.27 per share will be paid in December.
● SOURCE Thomson Reuters
