Thomson Reuters Q3 profit tumbles in 'challenging environment'

The group earned $162 million, or 19 cents per share, in the three months ended 30 September - down from $404 million or 49 cents per share a year earlier. Underlying operating profit rose three per cent to $711 million in the third quarter, from $690 million a year ago.

CEO Tom Glocer told investment analysts it was a challenging environment. 

"Despite difficult market conditions, our businesses delivered solid results in the third quarter," he said. "Our Tax & Accounting and Healthcare & Science businesses continued to perform very strongly, and sales of subscription products in our Markets and Legal units improved in Q3 over what we expect were their bottom in Q2. While the weak year-to-date net sales experienced in recent quarters are now flowing through into revenues, we expect this dip to be shallow and limited to the next few quarters.

"Our ongoing focus on the Reuters integration and close cost management across the company has enabled us to continue to grow underlying operating profit. While we would welcome a quick return to revenue growth, we understand how to operate in challenging markets and we are confident that we are outperforming the competition," Glocer said.

Adjusted earnings from continuing operations slipped to 43 cents per share from 47 cents a year ago, beating average analyst forecasts of 40 cents per share.

Thomson Reuters said its revenue slipped four per cent to $3.22 billion, partly because of unfavourable foreign exchange rates.

"While the weak year-to-date net sales experienced in recent quarters are now flowing through into revenues, we expect this dip to be shallow and limited to the next few quarters," Glocer said.

Revenue from ongoing businesses, excluding the impact of foreign exchange rates, fell two per cent to $3.21 billion. The average analyst forecast was $3.23 billion.

In the markets division, revenue from the media operation including Reuters news agency fell by 14 per cent to $90 million amid consolidation among traditional media outlets such as newspapers.

Overall corporate expenses tripled from a year earlier to $163 million in the third quarter, due in part to integration costs.

Thomson Reuters re-affirmed its previous guidance: it expects revenue to grow this year and underlying operating profit margin and free cash flow to be comparable to 2008. ■