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By Jessica Toonkel
April 26 (Reuters) - Thomson Reuters Corp TRI.N TRI.TO
on Tuesday reported higher-than-expected quarterly earnings on
improved results in its main business of providing news and
analytics to financial companies.
Sales in the Financial & Risk division, which accounted for
about half of the company's total revenue, outpaced
cancellations for the eighth straight quarter. Thomson Reuters,
whose shares rose more than 2 percent in New York and Toronto,
said the unit's net sales were positive overall.
"It's encouraging to see the continued progress in our
results despite the volatility and uncertainty in the external
markets," Chief Executive Officer Jim Smith said in an
interview.
Sliding commodity and oil prices, worries about the Chinese
economy and uncertainty about U.S. interest rates have put
pressure on Financial & Risk customers. U.S. financial shares
.SPSY have lagged the broader U.S. market .SPX this year.
"We are selling solutions that help customers reduce their
costs and do a better job managing the increasingly complex
regulatory environment," Smith said. "Nothing in this
environment makes those needs less."
Thomson Reuters, parent of Reuters News, competes against
Bloomberg LP and News Corp's NWSA.O Dow Jones unit for
financial customers.
Michael Formuziewich, a portfolio manager with Toronto-based
Leon Frazer & Associates, expressed confidence that Thomson
Reuters would fare well even with continued market volatility,
given its plans to continue to manage costs.
"For the most part, the growth in earnings for Thomson
Reuters in the next year are things they have control over,"
said Formuziewich, whose firm owns shares of the company.
Excluding special items, first-quarter earnings were 48
cents per share, compared with 39 cents a year earlier. Analysts
on average were expecting 44 cents, according to Thomson Reuters
I/B/E/S.
Revenue increased 1 percent to $2.79 billion from a year
earlier before factoring in currency changes, but it fell 1
percent when they were included.
The analysts' average estimate was $2.81 billion.
The company affirmed its 2016 revenue outlook of low
single-digit percentage growth.
Financial & Risk revenue fell to $1.51 billion from $1.55
billion as more companies that distribute content through
Thomson Reuters opted to bill customers directly.
Revenue at the Legal division rose 2 percent to $822
million, but was down 2 percent when factoring in currency
fluctuations. Tax & Accounting revenue increased 8 percent to
$389 million but fell 4 percent when currency changes were
included.
Thomson Reuters said in February that it expected to sell
its Intellectual Property & Sciences business in the second half
of the year. The company put out its confidential information
memorandum to interested parties two weeks ago, Smith said.
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Thomson Reuters earnings graphic [http://tmsnrt.rs/1SnVc3I]
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