By Kenneth Li
NEW YORK (Reuters) -Thomson Reuters Corp raised its full-year revenue forecast, which it said reflected strength in its legal, tax and accounting and corporates businesses, as it reported a better-than-expected second quarter profit on Thursday.
The global news and information company said that it now expects 2022 revenue to increase by 6%, from 5.5%, adding that revenue from its “Big 3” business segments will rise by 7%.
Shares in Thomson Reuters rose 3% in New York and Toronto after the parent company of Reuters News reported second quarter adjusted earnings of 60 cents a share. Analysts had on average expected 53 cents a share, Refinitiv estimates showed.
Thomson Reuters said its total revenues in the quarter rose 5% to $1.61 billion, matching Wall Street estimates, while operating profit rose 24% to $391 million.
“Leading indicators remain healthy, and we have a resilient, highly recurring business serving growing industries,” Chief Executive Steve Hasker said in a statement.
Thomson Reuters executives have said that because 80% of its revenues are recurring, this has helped insulate it from unpredictable economic pressures.
“Looking ahead, I am confident that we are well-positioned to navigate broader market concerns such as inflation and slowing economic growth,” Hasker added.
Hasker said on a conference call with financial analysts that the company was looking at potential acquisitions in the legal, tax and accounting and risk, fraud and compliance arenas, with a focus on automation tools.
‘HEALTHY PARANOIA’
Hasker said in an interview that Thomson Reuters did not see any major factors likely to derail its outlook, but nevertheless expressed a “healthy paranoia” about the rest of the year.
Digital advertising, which is facing its first recession, could have an impact on Reuters News, he said, adding that transactional revenue, which is not recurring, could have an impact across its business segments.
Thomson Reuters said revenue rose in five of its segments.
While the Big 3 segment was up 6%, Reuters News revenue rose 9% as a result of a boost from events and annual increases from payments from a news agreement with Refinitiv, a data company spun off from Thomson Reuters and now owned by the London Stock Exchange Group (LSEG).
The earnings report comes as the Communications Workers of America’s NewsGuild said nearly 300 Reuters journalists in the United States were staging a 24-hour strike over the company’s offer of a three-year contract with guaranteed pay raises of 1%.
The current rate of inflation in the U.S. is about 9%.
A Reuters spokesperson said Reuters’ salary and benefits include a competitive annual merit-based wage program that all Guild members participate in. “In addition … we have offered a wage increase minimum with the Guild, regardless of the size of the merit pool,” the spokesperson said in a prepared statement.
Thomson Reuters last month named Paul Bascobert as president of Reuters News, which earns about half of its sales by supplying news to Refinitiv, turning to a tech and media veteran to drive growth at the 171-year-old organization.
The company reported a net loss per share of 24 cents, due to a write-down in the value of its stake in LSEG, which it said was worth $7.1 billion as of July 31.
Shares in Thomson Reuters have outperformed the broader market this year, with its U.S.-listed shares down about 5% versus a 13.3% drop for the S&P 500.
Its peers include RELX Group’s LexisNexis, Bloomberg LP, News Corp’s DowJones and Wolters Kluwer.
(Reporting by Kenneth Li in New York; Editing by Alexander Smith)
