Thomson Reuters calms market nerves with solid Q4

Thomson Reuters calms market nerves with solid Q4

Shares in Thomson Reuters moved up more than five per cent as the giant news and information group reported Q4 sales and profit ahead of expectations, an increase in integration synergies and a forecast for continued growth through 2009.

The vendor reported a five per cent uplift in Q4 revenues to $3.4 billion, and underlying operating profit up 13% to $833 million. Full year revenue moved up eight per cent to $13.4 billion while operating profit increased 19% to $2.8 billion.

Presenting the results, Tom Glocer, Thomson Reuters CEO says: "Based on the current environment in the markets we serve, we expect our revenues to grow in 2009."

The firm is forecasting underlying operating margin comparable to 2008, boosted by revenue growth and higher savings from integration. Thomson Reuters now expects $1 billion in annualised cost savings from integration programmes by the end of 2011, up from $750 million of savings projected in May 2008 and raising the overall savings target to $1.4 billion.

The vendor says it is now beginning the second phase of the acquisition integration, which includes retiring legacy products and systems, consolidating data centres and rolling out new strategic products.

Unfavourable currency movements took revenue growth into negative territory at Thomson Reuters' most vulnerable business units. The markets division turned in $1.9 billion revenue in Q4, up four per cent before currency (down two per cent after currency), led by seven per cent growth in Emea, four per cent growth in Asia and a one per cent decline in the Americas. Fourth-quarter operating profit increased seven per cent to $365 million.

Full-year revenues in the market division were $7.9 billion, up six per cent before currency (and seven per cent after currency). Growth was spread across the division and was driven by strong performance from enterprise solutions, investment management, corporate services, commodities & energy and treasury units. Full-year operating profit increased 26% to $1.4 billions.

In sales and trading, growth in volumes from volatile markets halped counter losses from headcount reductions across the industry. Fourth-quarter revenues were $888 million, up two per cent before currency (down four per cent after currency). Full-year revenues were $3.8 billion, up four per cent before currency (and five per cent after currency), marked by double-digit increases in commodities & energy and Tradeweb.

Shares in the vendor moved up 5.6 per cent to 1396 pence in early afternoon trading.

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