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Thomson Reuters cautions over pandemic, geopolitical, economic risks

Thomson Reuters expressed more confidence in its financial outlook on Tuesday but cautioned that the ongoing pandemic and geopolitical risks and any worsening of the economy could hurt its ability to reach its goals.

"I believe we continue to benefit from a significant prevailing tailwind that drives the need for the trusted, accurate and actionable content and technology that we provide," chief executive Steve Hasker said in a memo to staff.

 

The company raised its 2022 revenue forecast after beating first-quarter expectations on strong growth across its core legal, tax and accounting, and corporate businesses. Adjusted earnings of 66 cents per share were five cents ahead of Wall Street expectations.

 

Operating profit was up seven per cent to $414 million and total revenues rose 5.5 per cent to $1.67 billion, also ahead of expectations, according to estimates from Refinitiv.

 

Revenues are now forecast to rise 5.5 per cent this year, up from an earlier estimate of about a five per cent.

 

The company’s three main divisions - Legal Professionals, Tax & Accounting Professionals, and Corporates - reported higher quarterly sales, led by an 11 per cent increase in the tax business.

 

Reuters revenue rose nine per cent to $176 million. Reuters News makes about half its revenue from supplying news to Refinitiv, the terminals and data business spun off from Thomson Reuters now owned by the London Stock Exchange Group. Thomson Reuters said its minority stake in LSE was worth about $7.2 billion on Monday.

 

While information services stocks continue to show growth, they have lagged the broader market in 2022 as investors switched to companies with more scope for recovery in profits as the pandemic abates.

 

Thomson Reuters US-listed shares are down about 20 per cent this year compared with a 10 per cent drop for the S&P 500 index. ■

SOURCE
Reuters