Cost cuts boost Thomson Reuters profit as revenue outlook brightens
Thomson Reuters reported a 2 percent rise in quarterly operating profit on Wednesday, largely due to cost cutting, and forecast higher revenue in 2013 as its division that serves financial institutions begins to turn around.
The global news and information company said it expects revenue to increase in the low single digits this year. Analysts had been forecasting a 2 percent rise.
Profit in the quarter increased on the back of "continued cost containment and lower reorganization costs", the company said. Organic revenue was flat.
"We enter 2013 with more confidence and a much stronger foundation," Thomson Reuters Chief Executive James Smith said in a statement.
"2012 will best be known as the year we turned the tide in our Financial & Risk business," he said. "I said last year that our journey would entail a multi-quarter turnaround; we are halfway through that process."
Financial & Risk, which accounts for 54 percent of total revenue, has struggled in recent years following a troubled launch for its flagship desktop product Eikon, which is aimed at bankers, hedge fund managers, and other financial industry professionals.
Cost cutting by banks after the financial crisis compounded the difficulties, especially in Europe.
Thomson Reuters said revenue from ongoing businesses in the fourth quarter rose 2 percent before currency changes to $3.36 billion. It was not immediately clear what the change in costs was on the same basis.
Adjusted earnings increased to $497 million, or 60 cents per share, from $445 million, or 54 cents per share, a year earlier.
The number of Eikon desktops installed rose 33 percent in the fourth quarter from the previous quarter to 33,900.
For the fourth quarter, revenue at the Financial & Risk division increased 1 percent due to growth in its Governance, Risk & Compliance business and its acquisition of electronic foreign exchange platform FXall.
Revenue in the division's Europe, Middle East and Africa region and in Asia was down 3 percent, respectively, while the Americas gained 6 percent.
Its Legal division, which includes WestlawNext, reported that revenue rose 2 percent in the quarter to $861 million.
Thomson Reuters recently acquired London-based Practical Law Company, which provides guidance and analysis tailored to specific areas of the law.
The board approved a 2 cent annual dividend increase to $1.30 per share.
Thomson Reuters' New York and Toronto listed shares are up 15 percent in the past 12 months at $30.65 and C$30.72, respectively.
(Reporting by Jennifer Saba; Editing by Edward Tobin and Toni Reinhold)