Thomson Reuters profit dips to $655m

New York: Thomson Reuters reported lower quarterly profit and revenue that were slightly below Wall Street expectations, but said sales trends pointed to a return to revenue growth this quarter.

The results show that Thomson Reuters 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.

Underlying operating profit fell 17 per cent to $655 million (Dh2.4 billion) in the second quarter, and adjusted earnings per share fell to 47 cents from 58 cents a year earlier, the news and data provider said yesterday.

Analysts on average were expecting earnings of 48 cents per share, according to Thomson Reuters I/B/E/S.

Revenue from ongoing businesses fell 2 per cent to $3.22 billion. Analysts on average were expecting $3.23 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 Thomas Glocer said in a statement.

"Based on these encouraging trends, we expect that Thomson Reuters will return to revenue growth in the third quarter."

Flat forecast

The company reiterated its forecast that 2010 revenue would be flat to slightly down compared to 2009, and that net sales would strengthen this year.

"From an organic revenue growth perspective, [it was] a little bit lighter than what we were looking for, but again I would emphasise that we knew the second quarter was going to be the last of the weak quarters," said RBC Capital Markets analyst Drew McReynolds.

"I don't think the slight miss on organic revenue growth is going to be a major factor for investors out there."

Thomson Reuters, like Bloomberg LP and other companies that serve financial customers, gets much of its revenue from long-term subscriptions.