Thomson Reuters: 11% rise in underlying profits

Thomson Reuters reported an underlying rise in operating profits of 11 per cent year on year, aided by cost cuts, as the company said results reflected the resilience of its business model.

The company said second-quarter underlying operating profit was $793m, up from $713m, over the same period the previous year.

Overall revenue rose five per cent from $3.1bn in the three months to the end of June last year to $3.3bn in the same period this year.

However, revenue fell on a like for like basis by four per cent once the effect of fluctuating world currencies was taken into account. With the currency fluctuations removed revenue rose by two per cent

Thomas Glocer, chief executive of Thomson Reuters, said he was pleased with operating results despite the continued weakness in the global economy.

‘Our revenues continued to grow in both the professional and markets divisions, which is a testament not only to the choice and balance of the markets in which we operate, but also the strength of our franchises in the challenging financial services and legal segments.’

Operating profit rose 87 per cent from $254m in the second quarter of 2008 to $475m in the same period this year however this reflected how the company was formed in April, 2008, from the merger of Reuters and Thomson.

Thomson Reuters reported overall gains in its tax & accounting business of eight per cent to $225m, healthcare & science businesses reported revenue accelerating to $217m, a year on year rise of seven per cent.

Its media business recorded a 19 per cent fall in revenue, to $91m, after currency considerations were taken into account. Prior to currency consideration the sector declined by six per cent.

The company said it was hurt by continued declines in the professional publishing and consumer businesses. Its core news agency business declined four per cent, prior to currency conversion, as a result of consolidation in traditional media outlets.

Thomson Reuters has so far achieved combined savings of $925m from the Reuters integration on its way to achieving an aimed saving of $1.4bn annually by the end of 2011. Its cost to achieve saving in the first half of 2009 was $195m.

Thomson Reuters reaffirms its previous outlook that revenues are expected to grow in 2009 and underlying operating margin would be comparable to 2008.

Shareholders are set tol vote later this week on a proposal to delist the company’s shares from the London exchange. The shares would then continue to trade in New York and Toronto.

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