Thomson Reuters Q3 net profit slides as markets unit sees revenues dip

Thomson Reuters Q3 net profit slides as markets unit sees revenues dip

Thomson Reuters posted a 59% fall in net earnings for the third quarter on integration costs and lower revenues at the recession-hit markets division.

Revenues were down four per cent, from $3.2 billion in Q3 2008 to $3.2 billion this year. Net profit for the quarter was $167 million, or 19 cents a share, down from $406 million, or 49 cents a share, in Q3 2008. Operating profit tumbled 32% to £378 million, compared to $553 million a year ago.

However, underlying operating profit, when items including restructuring charges are excluded, was up three per cent to $711 million, driven by currency rates and integration-related savings. Adjusted earnings per share were 43 cents compared with 47 cents in the third quarter of 2008.

The firm's markets division, which accounts for around 60% of all revenues, saw a six per cent fall in revenues after currency movements, to $1.86 billion. However, operating profit for the unit increased 10% to $369 million on integration savings.

Corporate expenses tripled to $163 million in the third quarter, due in part to integration costs. However, the integration has achieved combined run-rate savings of $975 million as at 30 September.

The company reaffirmed its previous outlook that revenues are expected to grow in 2009 and underlying operating profit margin and free cash flow will be comparable with 2008.

However it warns that the "revenue impact of weaker 2009 subscription net sales in Markets and Legal is expected to continue to be a drag on revenues through the first half of 2010".

Tom Glocer, CEO, Thomson Reuters, says: "Our ongoing focus on the Reuters integration and close cost management across the company has enabled us to continue to grow underlying operating profit. While we would welcome a quick return to revenue growth, we understand how to operate in challenging markets and we are confident that we are outperforming the competition."

Shares in the news and information giant were down just over one per cent, at $31.96 per share in afternoon trading.

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