Earnings up, Thomson Reuters forecasts higher revenue this year

The improved outlook reflects signs that the group’s financial and professional customers are recovering from the recession. A year ago Thomson Reuters was under pressure as those customers cut spending and employees.

“A shock like the world went through leaves a caution that hangs around for a while,” chief executive Tom Glocer said in an interview with Reuters on Thursday. “But there’s no question that the conditions themselves are getting better in many of our markets.”

The improving economy and new services helped lift Q4 earnings to $225 million, or 27 cents per share, up from $182 million, or 21 cents per share, a year earlier. Q4 adjusted earnings per share of 43 cents missed the average analyst forecast of 46 cents.

Revenue climbed three per cent to $3.46 billion. Analysts expected $3.44 billion. Full-year earnings came to $933 million, or $1.08 per share, up from $867 million, or $1.01 per share, in 2009. Revenue ended essentially flat at $13 billion.

Highlighting the brighter outlook, the company raised its annual dividend by seven per cent to $1.24 per share.

Thomson Reuters has invested heavily in new products such as financial desktop Eikon, online video news service Reuters Insider and legal database service WestlawNext. Glocer said these investments would pay off in 2011. “With this period of heavy investment now successfully completed and our markets improving, we have set our sights on accelerating growth and delivering strong returns on our investments,” he said in a statement. “We have targeted mid-single-digit revenue growth for 2011, accompanied by strongly expanding margins and increasing levels of free cash flow.”

Thomson Reuters’ New York-listed shares have risen 11.6 per cent so far in 2011. The Toronto-listed shares are up 10.8 per cent.

In an internal message, Glocer told staff: “I am proud of what we accomplished, but very clear that much remains to be done, and mindful that we need to accelerate the pace of change.”

Growth and efficiency would remain priorities for 2011 “and we will aspire to excellence in all that we do. We have the ability, and therefore the mandate, to go from good – or in some cases maybe just OK – to truly excellent in areas such as:

• “Establishing a winning performance culture, and strengthening talent and engagement across the company;
• “Becoming hands-down the world’s best news organisation; the organisational changes I wrote about earlier this week will advance this goal;
• “Delivering customer service that truly delights our customers; customers are the ultimate judges of a company’s excellence;
• “Delivering the most innovative platform-based products which  embody deep customer insight; and
• “Ensuring that our capital and talent is focused on the highest-value opportunities.

“Our commitment to excellence should also extend to our respect for our colleagues, communities and the environment. If each of the 55,000 of us achieves his or her own personal excellence, and we align our efforts, we will be unstoppable.

“We have turned the corner on growth. Now let’s reach for excellence.” ■