Thomson Reuters Corp reported sluggish growth in its Markets division, as the company struggles to accelerate adoption of its new Eikon flagship desktop for financial professionals.

The second-quarter results released on Thursday come on the heels of a management shakeout that resulted in the departure of Markets division chief Devin Wenig and several other high-level executives last week.

Thomson Reuters Chief Executive Thomas Glocer has now taken direct responsibility for the turnaround of the division and is preparing a plan to boost its revenue growth.

He will have about a year to make it work, according to several people familiar with the board's thinking.

I have a good plan coming together, Glocer said in an interview after the release of the results.

Thomson Reuters shares, which had fallen about 10 percent in the past 52 weeks, were up about 3.4 percent in early trading in New York and Toronto.

Revenue in the Markets division, which competes with Bloomberg LP, News Corp's Dow Jones and FactSet Research, rose 1 percent from a year earlier, excluding the impact of currency changes, slowing from a gain of 2 percent in the first quarter.

Overall revenue and earnings per share were within the ranges Thomson Reuters announced last week, when it was clear that improving the performance of the Markets division had become a top priority for the board and the company's controlling shareholder, Canada's Thomson family.

The Markets division accounts for about 59 percent of overall revenue, with the Professional division serving legal, accounting and other professionals making up the remainder. Professional division revenue rose 8 percent.

It is clearly disappointing and clearly a reflection of the market environment in which they operate, said Paul Sullivan, an analyst at Barclays Capital in London, who noted that organic growth had slowed from the first quarter.

It's also clear the take-up in new products is somewhat slower than probably the company and the market has envisioned, he said.

Markets division organic revenue growth, which strips out divestitures, acquisitions and currency changes, was flat in the second quarter after rising 1 percent in the first quarter.

Total revenue excluding divestitures was $3.20 billion, up 4 percent before currency adjustments. Adjusted earnings per share rose to 51 cents from 41 cents. The average analyst forecast was for revenue of $3.16 billion and earnings per share of 49 cents, according to Thomson Reuters I/B/E/S.

Underlying operating profit rose 17 percent to $669 million.


Many of the company's financial clients are still recovering from the economic crisis, with job cuts and pullbacks in spending. This, along with a difficult roll-out, is hindering sales of Eikon, which is aimed at knitting together dozens of disparate products after Thomson Corp's acquisition of Reuters Group Plc in 2008.

The new product incorporates social media-like functions such as Twitter, and was designed to be more cost-effective and easier to install and provide upgrades.

The company said it had sold more than 28,000 Eikon desktops since the launch in September 2010, of which only about 3,500 are to new users.

That means that of the company's roughly 500,000 financial markets users, only about 24,500 have migrated to Eikon.

I actually think Eikon is a very good product, Glocer said. It wasn't supposed to yet play a significant part of the revenues of the business.

Overall Markets division revenue rose 5 percent in Asia and 2 percent in Europe, Middle East and Africa but fell 1 percent in the Americas.

Glocer is expected to present his plan to boost the Markets division's performance within the next two months.

I am confident we can tune up the performance engine in Markets on a relative basis to perform more strongly than it has been, Glocer said.

Still, he said, he needed to be realistic. There is a wave of cost-cutting going across the financial services industries and that means ... we are going to have a much faster ship-shape vessel heading into a stiffer headwind.

Thomson Reuters reaffirmed its outlook, saying it expected revenue to grow in the mid-single digits in 2011.

The company's stock was trading at $34.80 in New York and C$33.01 in Toronto shortly after the opening.

Earlier on Thursday, Reed Elsevier, which owns legal data base product Lexis Nexis, reported first-half results that beat forecasts, helped by demand for its academic research.

(Additional reporting by Robert MacMillan; Editing by Tiffany Wu and Ted Kerr)