Reuters Profit Tops Estimates on Accounting, Legal GainsMadeline McMahon
Thomson Reuters Corp., a provider of news and information services, reported second-quarter profit that beat analysts’ estimates as its legal, tax and accounting businesses gained.
Excluding some items, profit totaled 48 cents a share, the New-York based company said in a statement, topping the 45-cents-a-share average estimate of analysts, according to data compiled by Bloomberg. Sales from ongoing businesses reached $3.16 billion. Analysts estimated $3.15 billion on average.
Thomson Reuters is counting on its smaller divisions to fuel growth as demand for financial-information products such as Eikon stalls, with Wall Street customers still recovering from the 2009 recession. Tax and accounting revenue gained 5.5 percent to $288 million, while legal sales rose 4.2 percent to $846 million.
“They’ve made a lot of investments in the financial and risk sector,” said Bobby Hagedorn, a St. Louis-based analyst at Edward Jones who has a buy rating on Thomson Reuters. “That’ll really be the key for this company going forward. They’re trying to gain some of the market share back that they’ve lost in the last few years.”
Revenue in the financial and risk division, which includes data products, fell 1.9 percent to $1.66 billion.
Thomson Reuters fell 3.8 percent to $34.12 at the close in New York. The shares have increased 17 percent this year.
Thomson Reuters named Andrew Rashbass to head its news business on May 29 in a newly created position. Rashbass, who previously worked at the Economist for 15 years, joined Thomson Reuters amid losses in the division that includes news.
The company reiterated its 2013 forecast for a revenue growth rate in the low single digits and a profit margin of 26 percent to 27 percent, adjusted for interest, tax, depreciation and amortization.
Earlier this month, New York Attorney General Eric Schneiderman started an investigation into the early distribution of the Thomson Reuters/University of Michigan index of consumer sentiment to select traders. Reuters agreed on July 8 to suspend the early release.
Bloomberg LP, the parent company of Bloomberg News, competes with Thomson Reuters in providing financial news and information.