Thomson Reuters profit tops Wall Street forecasts
Wednesday 8 May 2019
The year is off to a solid start, Thomson Reuters president and CEO James Smith declared on Wednesday in a statement with the group's first quarter results.
The parent of Reuters News reported stronger than expected Q1 profit and reaffirmed its forecast for the rest of this year and 2020.
Earnings excluding special items of 36 cents per share compared with 28 cents a year ago.
First quarter revenue rose eight per cent from a year ago to $1.49 billion, slightly below analysts’ average estimate of $1.5 billion.
“The trajectory of the business continued to improve on the progress made last year. Revenue growth is tracking to our outlook. Recurring revenue growth is the strongest we have seen in several years. Net sales are strong and our book of business continues to grow. Our transformation initiatives are on track and we are seeing good underlying margin improvement. We remain confident in our ability to achieve our 2019 and 2020 targets,” Smith said.
Currency exchange rates weighed on sales across the company’s operations. Excluding that effect, each of the company’s units reported higher revenue. The largest business, legal professionals, reported a three per cent rise in sales in constant currency and a 19 per cent jump in adjusted earnings.
For 2019, the company repeated its forecast for revenue growth of 7 to 8.5 per cent before the effect of currency exchange rates and sales growth of about half that pace in 2020.
Last year, Thomson Reuters sold a 55 per cent stake in its financial & risk (F&R) unit, which provides data and news primarily to financial customers, to private equity firm Blackstone. The deal valued the F&R unit, now a standalone business called Refinitiv, at about $20 billion.
Revenue from Reuters News more than doubled to $155 million in the quarter, due to a 30-year agreement for Reuters to supply news and editorial content to Refinitiv, which began in the fourth quarter of 2018.
Thomson Reuters, controlled by Canada’s Thomson family, has said it set aside $2 billion of the $17 billion proceeds from the Blackstone deal to make purchases to help expand its legal, tax & accounting and corporates businesses.
In December, Thomson Reuters said it would reduce its workforce by 12 per cent in the next two years, cutting 3,200 jobs as part of a plan to streamline the business and reduce costs. ■
- Thomson Reuters