07 February 2016

Thomson Reuters reports Q4 loss thanks to $3bn goodwill charge

09 February 2012  |  5506 views  |  0 Thomson Reuters logo web screen shot

Thomson Reuters has swung to a fourth quarter operating loss thanks to a $3 billion goodwill impairment charge related to its struggling financial services business.

The company has seen its share price fall by a third in the last year, largely because of the markets division, which has been hit by the financial crisis and a lukewarm reception for its new flagship desktop product, Eikon, although this has seen installations rise from 8000 to 15,000 in the last three months.

As well as a number of management changes, including the departure of CEO Tom Glocer, Thomson Reuters has now broken up the markets division into smaller, more focussed business units, incurring a $50 million charge for Q4.

The vendor actually posted a five per cent increase in revenues for the three months, to $3.4 billion. Adjusted Ebitda was also up, 26%, to $864 million and underlying operating profit rose eight per cent to $657 million.

However, a $3 billion, non-cash, goodwill impairment charge was incurred thanks to testing required under International Financial Reporting Standards (IFRS). This means that under IFRS measures it posted an operating loss of $2.59 billion for the period, compared to a $307 million profit in Q4 2010. No details on the reason for the charge were given.

For the full year, revenues from ongoing businesses were $12.9 billion, a five per cent increase before currency. Adjusted Ebitda increased 20% to $3.41 billion and underlying operating profit was up nine per cent to $2.58 billion. Under IFRS measures, the full year saw an operating loss of $705 million, compared to a $1.42 billion profit for 2010.

For the fourth quarter, revenues at the old markets unit rose by two per cent, to $1.86 billion, compared to a nine per cent rise at the professionals division. There was also a two per cent revenue rise for the year at markets, to $7.49 billion.

James Smith, who took over as CEO from Glocer in December, says: "The units in the former Professional division continued to perform well and we made significant strides in kick-starting the growth engine in our former Markets division. We have simplified our organisation; we have strengthened our management team; and we are making progress toward improving our execution capability. We are focused in 2012 on a series of product launches and service improvements across all our key customer groups."

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

01 February, 2012
14 December, 2011
02 December, 2011
28 September, 2011
22 July, 2011
28 October, 2010
14 September, 2010

Related company news

Your browser is unable to support Flash files.

Top topics

Most viewed Most shared
Fintech rising: Resistance is futile, says...
10238 views comments | 47 tweets | 39 linkedin
Digital transformation driving earnings at...
8778 views comments | 42 tweets | 35 linkedin
ECB eyes up European P2P payments
7638 views comments | 28 tweets | 38 linkedin
Visa opens up to developers
6998 views comments | 23 tweets | 40 linkedin
It may take ten years, but blockchain tech...
6050 views comments | 20 tweets | 19 linkedin

Featured job

Competitive Package
New York City, NY. USA

Find your next job