S&P lifts Thomson Reuters outlook on improved performance

The ratings agency noted other positive developments  including the view that the Reuters integration will be successfully completed next year and that credit ratios will remain in line with S&P's expectations in the medium term.

Thomson Reuters' A- rating largely reflects what S&P views as the group’s strong business-risk profile, expanded product portfolio following the $16 billion acquisition of Reuters in 2008 and geographic diversity.

In S&P's opinion, the benefits of the integration are partially offset by Thomson Reuters' credit protection measures, which it said are somewhat weak for the ratings, and the sizeable annual dividend, which reduces free cash flow.

S&P said it could consider raising the company's ratings if Thomson Reuters was able to demonstrate continued strengthening of its operating performance and credit measures. A downgrade could occur if the group’s performance falls below S&P's expectations or if the company faces significant difficulties completing the Reuters integration.

In July Thomson Reuters reported its second-quarter profit fell 8.6 per cent to 35 cents per share from 38 cents a year earlier on lower revenue from its markets division, although the company said it expected total revenue to grow in the current quarter. The stock is up 9.6 per cent this year.

The company's next quarterly earnings report is scheduled on 28 October. ■