Thomson Reuters Corp. said its 2012 revenue growth was on track after reporting strong software sales to tax and accounting firms, even as revenue from financial institutions was weak but making progress.
The global news and information provider said on Tuesday that revenue from ongoing businesses rose 3 per cent before currency changes to $3.2-billion (U.S.) in the second quarter, which was in line with analysts' expectations.
Adjusted earnings per share were 54 cents compared with 51 cents a year ago, with the company attributing the increase to the elimination of integration expenses related to the 2008 merger of Thomson Corp. and Reuters Group PLC, and a lower tax rate. That was above analysts' average estimate of 50 cents, according to Thomson Reuters I/B/E/S.
The company's tax and accounting division reported the strongest organic revenue growth, up 5 per cent to $283-million. The division also helped lift revenue in the first quarter. Organic revenue strips out acquisitions, divestures and currency changes.
Organic revenue in the legal division, which includes WestlawNext, rose 2 per cent to $818-million, while the Financial & Risk division, which serves banks and other financial institutions, reported a 1-per-cent drop in revenue to $1.8-billion.
"Our Financial & Risk year-to-date revenue performance, though tepid, has held up relatively well despite growing headwinds in the global financial services industry," chief executive officer James Smith said in a statement. "We have been making progress across the Financial & Risk business with a more rigorous and disciplined approach."
Big banks including Morgan Stanley, Goldman Sachs, and Deutsche Bank have announced further belt-tightening by cutting costs, including reducing staff, as they address the impact of the European debt crisis and the costs of increased regulation.
Thomson Reuters said Financial & Risk revenue from Europe, the Middle East and Africa was flat, while revenue from the Americas grew 3 per cent and revenue from Asia fell 2 per cent, primarily related to Japan.
It said sales of its flagship Eikon product, which competes against Bloomberg LP, FactSet Research Systems Inc. and Interactive Data Corp., totalled more than 19,000 at the end of the second quarter, up around 20 per cent from the end of the first quarter.
Thomson Reuters said underlying operating profit, which excludes divestures, slipped 8 per cent to $617-million in the quarter. Underlying operating profit margin fell to 19.3 per cent from 21.2 per cent a year ago due to investments and planned increases in expenses.
The company affirmed its previously announced business outlook for the year, forecasting revenue to grow in the "low single digits" and underlying operating profit margin to range between 18 per cent and 19 per cent.
Reed Elsevier and Wolters Kluwer , which compete with Thomson Reuters' legal and scientific products, reported better-than-expected results in late July.