Thomson Reuters has bucked the gloomy market outlook in its Q3 results statement as integration savings ran ahead of plan and the company confirmed its financial guidance for 2008.
The global news and information group reported revenues of $3.3 billion for the quarter, an increase of 8% compared to 2007 pro forma third quarter revenues. Net income fell to $381 million, compared with $2.97 billion a year earlier, when the company booked an additional $2.66 billion in earnings from discontinued operations.
Tom Glocer chief executive officer of Thomson Reuters, comments: "The strong growth and profitability of our large professional division highlighted its ability to perform well through the economic cycle, while our markets division delivered good results despite extreme conditions in global financial markets."
Revenues increased seven per cent on a pro forma basis to $2 billion in the markets division, with operating profit rising 20% to $346 million. Growth was recorded across all aspects of the business: revenues in sales and trading ticked up five per cent to $964 million on the back of growth in treasury and energy and commodities; investment and advisory was up nine per cent to $600 million driven by analytics sales; enterprise revenues moved up eleven per cent to $307 million as customer demand for reference and pricing datafeeds remained strong.
The integration programme also went well, with the business achieving run-rate savings ahead of plan at $550 million at a cash cost of $237 million.
In confirming its outlook for FY08, the company is forecasting pro forma revenue growth of between six and eight per cent and underlying profit margin between 19% and 21%. The outlook for free cash flow margin, excluding synergy and integration costs, has been raised and is now estimated to be between 13% and 15% of revenues.
Despite the positive outlook, analysts nonetheless continued to fret over the downside risks to the markets division - which accounts for about 60% of group revenue and almost half of profits - with the carnage in the investment banking sector likely to feed through to the company's results next year.
In mid-morning, Thomson Reuters shares were trading up in London by 6.13% at 1194 pence.