Thomson Reuters Corp
The news and data provider, which has announced several reorganizations in recent months, reaffirmed its outlook for 2011 as its margins improved.
The company said in September that it would merge its Professional division, serving mainly lawyers and accountants, with its struggling Markets division, which targets banks and other financial institutions.
We expect the benefit of these changes will improve sales performance in 2012 and benefit 2013 revenue growth, Chief Executive Tom Glocer said in a statement.
The Markets division, which accounts for about 58 percent of overall revenue, posted revenue growth of just 1 percent as banks continued to slash jobs and costs.
The company has also been hurt by the slow uptake of its new Eikon desktop product for traders and analysts. Thomson Reuters said it had sold or migrated 32,000 Eikons by the end of September, up from 28,000 three months earlier.
Adding to the thousands of job cuts in the banking industry over the past year, Credit Suisse
Conditions were challenging in some of our markets, but that's not a good enough excuse as various competitors were still able to grow their businesses, Glocer said in a memo to staff. The company would grow by driving sales in fast-growing markets and taking share in slower ones, he said.
Glocer is under pressure from the board and the company's controlling shareholder, Canada's Thomson family, to improve performance, sources familiar with the board's thinking said in July. At that time, sources said he had about a year to make that happen.
Jim Smith, the former head of the Professional division, was elevated to the new role of chief operating officer in September, putting him in a strong position to succeed Glocer.
I think the sentiment heading into the quarter was pretty negative and these results were better than what people were expecting, said an analyst at a major Canadian bank. Some investors thought the 2011 guidance would be cut.
Thomson Reuters reported third-quarter revenue of $3.26 billion (2.04 billion pound), up 5 percent before currency changes. Analysts had expected $3.23 billion, according to Thomson Reuters I/B/E/S.
Revenue in the Professional division, which accounts for 42 percent of overall revenue, increased 10 percent after growing 8 percent in the second quarter. The 1 percent revenue growth in the Markets division was unchanged from the second quarter.
Adjusted earnings per share rose to 56 cents from 45 cents in the same quarter last year. Analysts had expected earnings of 53 cents per share.
Thomson Reuters said it still expects revenue to grow by a mid-single-digit percentage rate in 2011.
The company's underlying operating margin improved to 22.0 percent, from 21.2 percent a year earlier.
(Reporting by Jennifer Saba; Editing by Ted Kerr)