News and data provider Thomson Reuters Corp reported a lower quarterly profit on Tuesday, reflecting the lingering effects of the financial crisis on sales to its business and legal clients.
The company reiterated that net sales would strengthen in 2010, and that revenue would grow again in the second half.
The tentative recovery in our net sales that we began to see in the second half of 2009 has firmed and accelerated in the first quarter of 2010, Chief Executive Thomas Glocer said in a statement.
The company reported a first-quarter underlying profit of $555 million, down 6 percent from $590 million last year.
Adjusted earnings per share fell to 36 cents from 40 cents in the same quarter last year, but beat the average analyst forecast of 31 cents, according to Thomson Reuters I/B/E/S.
Revenue from ongoing businesses was $3.14 billion. Analysts, on average, were expecting $3.11 billion.
Excluding the impact of foreign exchange rates, revenue fell 2 percent.
Revenue was flat in the Markets division, which serves financial industry customers and competes with companies such as Bloomberg LP and News Corp. Excluding the impact of foreign exchange rates, revenue fell 4 percent.
Revenue rose 2 percent in the Professional division, which sells databases and other information reservoirs to lawyers, accountants, scientists and healthcare workers. Excluding the impact of foreign exchange rates, this revenue rose 1 percent.
Markets division revenue depends heavily on long-term subscriptions. The financial crisis, which crested in early 2009, triggered massive layoffs and cancellations of trading terminals. While the economy has improved, many of these cancellations have shown up in recent quarterly results.
The legal business is similar. Many law firms cut staff as they struggled in the recession, and cash-strapped clients sought lower legal bills. Legal revenue slipped 3 percent before currency adjustments.
The company stuck to the forecasts it issued in February, saying net sales would strengthen throughout 2010.
It also repeated that 2010 revenue would be flat to slightly down and that underlying free cash flow would be down slightly from 2009 as it invests in new products and platforms.
Thomson Reuters said it would spend more than $1 billion on new technology and products. Among them is Eikon, a new desktop for its financial and trading clients. It also debuted a new version of Westlaw, a large pool of information for lawyers, during the first quarter.
(Reporting by Robert MacMillan and Jennifer Saba; Editing by Ted Kerr)