Thomson Reuters revenue growth slows
News and information publisher Thomson Reuters Corp reported slower revenue growth in its key Markets division as the U.S. credit crisis forced layoffs and budget cuts at global investment banks, sending its shares down 4.5 percent.
The company affirmed its 2008 outlook — citing resilience in the Professional division that sells databases and tools to accountants, lawyers, tax, health and other professionals — but investors worried that the real test would come when customers set their 2009 budgets.
Second-quarter pro forma revenue rose 11 percent from a year earlier to $3.4 billion, compared with the first quarter’s 12 percent increase to $3.3 billion.
The pro forma results assume Thomson and Reuters had been operating as one company in the second quarter of last year.
Markets division revenue rose 12 percent to $2.1 billion, but the closely watched organic growth rate — which excludes the impact of currency exchange fluctuations and acquisitions — was 7 percent, slower than the first quarter’s 9 percent.
Analysts had been looking for organic growth of 7 percent to 8 percent in the Markets division as the U.S http://payday-badcredit.com. subprime mortgage crisis and credit crunch have led to thousands of layoffs among firms that are Thomson Reuters’ clients.
“The results were not great. The market was pricing in half-decent figures and that’s what it got,” said Manoj Ladwa, a derivatives trader at TradIndex.
Thomson Corp of Canada bought London-based Reuters Group Plc in April this year for about $16 billion in cash and stock, aiming to expand its market beyond North America. For Reuters, the deal reduced its exposure to financial markets.