Shares in Reuters slipped to a year-low after the UK news and financial information group disappointed investors by posting a modest rise in core subscription revenues for Q3 and failing to upgrade second half forecasts.
Reuters stock fell over five per cent to 346 pence - the lowest point in a year - following the revenue update, before recovering slightly during the day to stand at 354.50 pence by mid-afternoon.
The vendor says total revenue rose to £611m for the three months to the end of September 2005, an increase of eight per cent from last year on actual basis, which includes acquisitions.
Underlying recurring revenues rose 1.5% to £574m, in line with Reuters' own forecasts but slightly short of analysts' expectations. On an actual basis Reuters' third-quarter recurring revenue rose nine per cent from £528m a year ago.
But the group disappointed the market by repeating a forecast of one to two per cent underlying growth in recurring revenue for the second half of 2005.
Tom Glocer, chief executive, Reuters, told reporters that nothing had changed since July when the company said it expected between five to seven per cent annual revenue growth by 2008.
In a statement Glocer says the group is still looking to win customers in new markets: "We are boosting our content by agreeing to acquire EcoWin with its in-depth macroeconomic data, adding liquidity to our fixed income and foreign exchange trading systems and making progress in emerging markets such as China and Brazil."
The vendor said in July that it would also focus on electronic trading and will launch a multi-asset trading platform for markets including fixed income, derivatives, commodities and energy.
The group launched a fixed income trading service in a bid to compete against rivals Bloomberg and Thomson Financial in the bond markets.
Commenting on rumours that surfaced earlier this week that Bloomberg could be sold to Thomson Corporation, Glocer told reporters that he expected private equity firms to buy rival Bloomberg should the company be put up for sale but that a purchase by Thomson could end up benefiting Reuters by cutting down the number of competitors in the market.
New York mayor Michael Bloomberg said last December that he did eventually plan to sell the the financial data firm. Earlier this week Bloomberg was quoted by the New York Post as repeating his plan to sell the company, although a deal is not imminent.