Thomson Reuters' profit beats estimates; outlook steady

Total revenue rose 2% to $1.65 billion, slightly missing sales expectations, according to Refinitiv. Divestitures negatively impacted revenue.

Chief executive Steve Hasker told investors: “Since discussing AI on our Q1 call, our conviction around our opportunity to leverage generative AI has strengthened. As a result, we’re accelerating our investment in the short term as we work to leverage these exciting capabilities for the benefit of our professional markets.”

Generative AI is a type of artificial intelligence that generates new content or data in response to a prompt, or question, by a user.

Thomson Reuters maintained its full year 2023 outlook and said the first half of the year gave it “increasing confidence” about its financial outlook but cautioned that “many signs that point to a weakening global economic environment” could impact its guidance.

Hasker said Thomson Reuters will start to see “meaningful revenue uptick” from AI next year.

Organic revenue in the Reuters News division was up 1% in the quarter, driven by a lower contractual year-over-year price increase in the company’s news agreement with London Stock Exchange Group, slower events growth and lower digital revenues.

Thomson Reuters sold 15.5 million shares in LSEG in Q2 which had a market value of about $3.5 billion, based on LSEG’s closing share price on that day.

“I am pleased with our performance in the second quarter as we continued to see good momentum across our portfolio despite an uncertain macro backdrop,” Hasker, said.

Reuters News revenues of $194 million increased 2% (1% organic). The moderation in revenue growth was driven by a lower contractual price increase in 2023 compared to 2022 of the news agreement with the Data & Analytics business of LSEG, slower events growth and lower digital revenues.

Thomson Reuters indirectly owns LSEG shares through an entity that it jointly owns with a Blackstone consortium and a group of current LSEG and former Refinitiv senior management. During the second quarter of 2023, the company sold 15.5 million shares that it indirectly owned for $1.6 billion of gross proceeds. As of 31 July 2023, Thomson Reuters indirectly owned approximately 31.8 million LSEG shares, which had a market value of approximately $3.5 billion based on LSEG’s closing share price on that day.

In July, the company acquired Imagen, a media asset management company, which will be part of Reuters News. ■