Earnings: Reuters' 07 Profit Dips On Home Stretch To Thomson Merger
This story was written by Robert Andrews.
Reuters' (NSDQ: RTRSY) 2007 full-year pre-tax profit fell 13 percent to 273 million ($542 million) - attributed to less income from disposals than last year, when it sold its Factiva stake. So operating profit is up 14 percent to 292 million ($579 million), and revenue was up 1.5 percent to 2.6 billion ($5.16 billion). Reuters forecasts Q1 2008 revenue to grow nine percent, "despite the uncertain market environment".
-- Media division (overall revenue up one percent to 172 million or $341 million) consumer revenue was up six percent to 30 million ($59 million), "driven by strong growth in online syndication and advertising". Revenue from agency services (ie. wire reports and TV footage) was flat at 142 million ($282 million).
-- Research and asset management division (revenue up 20 percent to 363 million or $720 million) wealth management services noted 11 percent growth to 134 million ($266 million), "driven by continued customer demand for online feed and web based solutions"; it's continuing to build an online ad business.
-- Thomson: Reuters was hit by 45 million ($89 million) in costs relating to the now-cleared merger and expects to return proceeds to shareholders 14 days after the expected April 17 transaction completion. Both Thomson (NYSE: TOC) and Reuters hold shareholder meetings on March 26.
In a light-hearted analysts presentation, CEO Tom Glocer: "This is the last we'll do as a standalone entity ... It feels like Chinese new year here today. The results are a fitting end to this chapter in the Reuters story." Working out cost savings from eliminating Thomson overlaps "is a relatively straightforward process", COO Devin Wenig said. Reuters News will be available to Thomson Financial clients from day one. Glocer acknowledged economic risks: "Our budget for 2008 remains a prudent one." The new entity will be a "90 percent digital business".
By Robert Andrews