UK news and information group Reuters is reporting a better than expected increase in third quarter revenue and says it expects full year growth to be at the top end of estimates. The vendor is also selling its 50% stake in news and business information outfit Factiva to joint venture partner Dow Jones for a total consideration of $160 million.
Reuters is reporting a 3.3% increase in third quarter revenue to £631 million.
The vendor says underlying sales grew by 5.3% during the period and it saw the "strongest quarter of net sales so far this year".
Desktop software sales and electronic trading systems fees were up 20% in the third quarter, says the vendor, while growth in algorithmic trading is stimulating demand for high speed datafeeds.
Reuters chief executive Tom Glocer told reporters that the group "didn't see any signs of the typical summer slowdown".
The UK group also narrowed its full-year growth view to the top end of its previously stated five-to-six per cent range. However Reuters shares slipped 0.80% - or 3.50 pence - to 433.75 pence in morning trading as some investors had been expecting the group to raise its full-year guidance.
But looking ahead, Reuters says that subscription and transactions revenues are expected to continue to drive revenue growth but warns that outright revenue from software sales is unlikely to be as strong as in the fourth quarter of 2005 because "new business has been more evenly phased this year".
Reuters is also selling its 50% stake in archival news and business information firm Factiva, which it founded in 1999 as a 50/50 joint venture with Dow Jones.
Dow Jones is paying $153 million in cash plus $7 million in preferred stock issued by Factiva for Reuters' stake in the business. Reuters will also receive half of all cash remaining on Factiva's balance sheet after settlement of any outstanding inter company items.
In connection with the transactions, Reuters will continue to provide content to Factiva and has agreed not to compete with Factiva's core business for two years.
Dow Jones says Factiva will be integrated into its enterprise media group, which is run by former Factiva CEO Clare Hart.
The deal is expected to close by the end of 2006.
In a separate move, Reuters has appointed of Nandan Nilekani, chief executive officer and co-founder of Indian IT firm Infosys, as a non-executive director.
Reuters said last year that it was investing around $4 million on a five year plan to scale up its operations in India under plans to target emerging markets.