News and information provider Thomson Reuters Corp's revenue growth accelerated in the first quarter as it reaped the benefits of heavy spending on new products, and the company said it plans to sell two more businesses to fund further investment.
Thomson Reuters said on Thursday it expects to raise about $1 billion from the sale of its enterprise risk management and investment accounting software businesses, along with previously announced sales of its BARBRI legal courses product and Scandinavian legal and tax and accounting units.
Chief Executive Thomas Glocer said the funds would be reinvested in the core business.
First-quarter revenue from ongoing businesses was $3.2 billion, up 5 percent before currency adjustments, quickening from 4 percent growth in the preceding quarter.
Based on our good start to the year, we are confident that we will deliver on our expectations for the full year, Glocer said in a statement accompanying the results.
Adjusted earnings per share, including a one-time charge, rose to 39 cents from 36 cents in the same quarter last year. Adjusted earnings per share came to 42 cents excluding the one-time charge, missing the average analyst forecast of 43 cents, according to Thomson Reuters I/B/E/S.
Thomson Reuters, which provides news and information to financial, legal, accounting and healthcare professionals, reaffirmed its 2011 forecast for mid-single digit revenue growth. It also reiterated that the operating profit margin is expected to increase by at least 100 basis points this year.
First-quarter underlying profit increased 1 percent, with a corresponding margin of 17.2 percent. Excluding the $39 million one-time charge, the underlying profit margin was 18.4 percent compared with 18 percent in the same period of 2010.
LEGAL DRIVES PROFESSIONAL DIVISION
Professional division revenue increased 8 percent to $1.38 billion, driven by a 10 percent increase in legal revenue. The WestlawNext legal database has been sold to more than 18,500 customers since its launch in February 2010, representing 34 percent of Westlaw's revenue base, the company said.
In the Markets division, which competes with Bloomberg LP and News Corp's Dow Jones unit, revenue rose 2 percent to $1.87 billion.
Like Bloomberg, Thomson Reuters gets much of its revenue from long-term subscriptions for its desktop products.
Thomson Reuters has invested heavily in new products such as its financial desktop Eikon, high speed data feed platform Elektron and WestlawNext.
The company said it has sold or migrated more than 19,000 Eikon desktops since the product's launch in September 2010.
Reed Elsevier said earlier this week that underlying sales at its legal and professional and risk divisions had returned to growth in the first quarter, thanks to strong sales in the United States although law firms, corporations and governments continued to spend cautiously.
The Anglo-Dutch company's LexisNexis legal business competes with Thomson Reuters' Westlaw.
(Editing by Ted Kerr)