Thomson Reuters' biggest challenges are now outside - James Smith

It said revenue from ongoing businesses grew four per cent before currency changes to $3.19 billion, above analysts’ average forecast of $3.13 billion. Adjusted earnings per share rose to 44 cents from 37 cents a year earlier, beating analysts' average forecast of 41 cents per share.

“I am really pleased with how the team has responded and the progress we are making inside the company,” chief executive James Smith said in an interview with Reuters. “The biggest challenges right now are outside the company, the macro economic environment, particularly in Europe.” He added: “It is the first quarter and only the first quarter, but the good news is most of our businesses are doing well, and we are making progress across all of them.”

While the legal and tax & accounting divisions lifted overall results, the business serving the financial industry remains under pressure from layoffs and other cost cuts at banks. The company said Q1 revenue at its financial & risk division grew one per cent to $1.8 billion as declines in sales to traders and wealth managers were offset by increases in sales to risk and compliance customers, as well as acquisitions. The legal unit reported three per cent revenue growth to $777 million. Tax & accounting posted revenue growth of 31 per cent to $310 million.

“Our Financial & Risk business continues to make progress in a very difficult environment,” chief executive Smith said in a statement. “We are executing against a more focused strategy.”

A key financial product, Eikon, has struggled to gain traction with customers, selling over 16,000, up 30 per cent from the previous quarter.

The first quarter results reflect a new reporting structure put in place after a major reorganisation last year resulted in the exit of several high-level executives including former CEO Tom Glocer. Smith, who headed the company's former professional division, took his place at the beginning of the year. The new organisation was aimed at simplifying the company created by Thomson Corp’s acquisition of Reuters in 2008. 

Thomson Reuters said underlying operating profit rose two per cent to $545 million. Underlying operating profit margin fell to 17.1 per cent from 17.4 percent a year ago due to higher depreciation and amortisation from new product launches, the company said. The company affirmed its 2012 forecasts, including revenue growth in the “low-single digits”. ■