Reuters shares plunged to a 14 year low today after Thomson Corporation, parent company of rival financial information vendor Thomson Financial, reported higher than expected Q4 2002 results.
After starting the day at 120 pence, Reuters shares dropped by 5.75% to 113 pence, the lowest since September 1988.
In addition, Fitch Ratings has said it may downgrade the group's rating. In a statement, the credit ratings agency cited concern over Reuters' markets outlook, the cost of the group's restructuring programme and the expected adverse effect on net leverage of the proposed Multex acquisition.
Reuters recently reported record losses for 2002 and announced plans to lay off 3000 staff over the next three years.
Canada's Thomson Corporation reported a rise in revenues for last year, which increased by 7% to $7.8 billion.
The corporation's revenue for the quarter was $2.2 billion, a 3% increase over the fourth quarter of 2001. Earnings attributable to common shares were $283 million for Q4 2002, compared to $254 million a year earlier.
In a statement the company says it is still targeting average annual revenue growth between 7% and 9% in 2003 but early indications suggest that continued economic softness and market uncertainty will continue in 2003.
The company's business unit Thomson Financial, which has made an aggressive play for Reuters' revenue streams, reported a decline of 3% in annual revenues to $1.5 billion, while EBITDA increased 4% to $418 million.
Fourth Quarter 2002 revenues also slipped, falling 3% to $380 million, while EBITDA increased 6% to $120 million.
Thomson Financial said the revenue decline was attributable to overall weakness in the global financial services industry.