Thomson Reuters results beat expectations
Thomson Reuters Corp (TRIL.L: Quote, Profile, Research, Stock Buzz) (TRI.TO: Quote, Profile, Research, Stock Buzz) reported stronger-than-expected quarterly results as gains in its professional division more than offset slowing growth in the business that serves financial institutions, sending its shares up as much as 5.5 percent.
The news and information publisher, which was formed by Thomson Corp’s purchase of Reuters Group Plc in April, did not provide financial forecasts for 2009, but affirmed its 2008 outlook for revenue and operating profit margin.
“If you look at our average monthly net sales, they’re positive again through October and positive in the third quarter,” Chief Executive Thomas Glocer said in a phone interview. “If you want to start thinking about growth for next year, that’s a good thing.”
The company’s London shares were up 3.72 percent at 1,117 pence in late trading after trading as high as 1,135 pence.
The London shares are down nearly 30 percent since the stock began trading in April.
Third-quarter net income was $380 million, or 46 cents a share, compared with $2.97 billion or $4.61 per share a year ago. Excluding nonrecurring items, discontinued operations and other items, profit was 48 cents a share, beating the average analyst forecast of 34 cents, according to Reuters Estimates.
Pro forma revenue rose 8 percent to $3.33 billion, topping Wall Street forecasts of $3 short-term cash loans.24 billion. Pro forma figures assume the Thomson Reuters deal had closed on January 1, 2007.
“The numbers look slightly ahead,” said Alex DeGroote, a media analyst at Panmure Gordon in London, adding that Thomson Reuters was “not too bearish on ‘09 markets growth potential.”
Thomson Reuters stood by its forecast for 2008 revenue growth of 6 to 8 percent excluding currency effects, and affirmed its forecast for an underlying operating profit margin of between 19 and 21 percent.
“NOT DISCRETIONARY GOODS”
The company raised its forecast for 2008 free cashflow margin to between 13 percent and 15 percent of revenue, excluding synergy and integration costs.
“We went out in February and said, in a company where there were a million moving pieces moving into an awful market, we would do 6-8 percent growth,” Glocer said.
“The fact that we don’t have to change that is a very good thing. Ditto the margin,” he said.
“Our products are not discretionary goods,” he added on a conference call, reiterating that the markets division, which serves financial institutions, could see positive growth in 2009.
Organic revenue growth at the markets division was 5 percent in the third quarter, slowing from 7 percent in the second quarter.