Thomson Reuters' Q3 results better than expected

Gains in the professional division more than offset slowing growth in the markets division.

Q3 net income was $380 million (46 cents per share) compared with $2.97 billion ($4.61 per share) a year ago. Excluding non-recurring items, discontinued operations and others, profit was 48 cents per share, higher than the average analyst forecast of 34 cents.

Revenues were $3.3 billion, eight per cent higher than a year ago. Underlying operating profit was 17 per cent higher at $676 million. Media revenues were five per cent higher at $111 million. 

“Our results demonstrate the strength, breadth and balance of our company, as our business continued to perform well in the third quarter and our integration plan began to deliver accelerated early savings,” CEO Tom Glocer said.

"The strong growth and profitability of our large Professional Division highlighted its ability to perform well through the economic cycle, while our Markets Division delivered good results despite extreme conditions in global financial markets.

"We are benefiting from our business model which focuses on achieving leading positions in key professional markets, seeking profitable growth in emerging as well as developed markets and providing our customers with deeply relevant content and services via superior product platforms.

"Our revenue growth rates continue to lead our markets and, coupled with integration savings and cost discipline, will help drive continuing profit growth. Moreover, our ability to translate profits into cash flow, supported by our strong balance sheet and liquidity, should allow us to take advantage of investment opportunities that may result from market disruptions while maintaining a disciplined approach to capital allocation."

Glocer said it was the most “wrenching” period he had seen in his 15 years with the Reuters business.

Some analysts have said Thomson Reuters’ revenue could fall in 2009 due to budget cutbacks and payroll cuts among its financial services industry clients. Reuters reported earlier that financial services firms and their staff are being forced to a new era of austerity.

Financial firms worldwide have slashed more than 130,000 jobs in the current global financial crisis, with thousands more losses expected as banks totter and hedge funds haemorrhage assets.

Wall Street bonuses could fall by 41 per cent in 2009 and in the City of London, the cash bonus pool is forecast to fall by nearly 60 per cent this year.

A separate Reuters report on Wednesday said a number of deals designed to cure the crisis are in danger of unravelling, with losses mounting at banks and economies showing signs of serious deterioration.

Thomson Reuters’ London-traded shares, which have lost about 30 per cent of their value since the 17 April merger, closed 4.55 per cent higher. They gained 2.86 per cent in Toronto, 0.46 per cent in New York, and 1.3 per cent on NASDAQ. ■