TORONTO (Reuters) – Thomson Reuters Corp on Wednesday reported a 2 percent rise in quarterly revenue and reaffirmed its 2018 forecast, saying it was on track for a “solid” year. The news and information provider reported second-quarter revenue of $1.31 billion, compared with $1.28 billion a year ago. Adjusted for special items, earnings were 17 cents per share, down from 19 cents per share a year ago.
Analysts had expected revenue of $1.31 billion and earnings of 11 cents a share, according to Thomson Reuters I/B/E/S.
Thomson Reuters reported a 6-percent decline in operating profit to $204 million, which it said was primarily due to costs and investments ahead of the planned sale of a majority stake in its Financial & Risk business to Blackstone Group LP.
“It’s a bit of a mixed bag,” said Doug Arthur, an analyst at Huber Research Partners. “The underlying profitability of legal and tax & accounting was a little disappointing … the organic growth of the remaining company looked pretty good.”
Thomson Reuters agreed in January to sell a 55-percent stake in the Financial & Risk unit, which sells data and news primarily to financial customers, to Blackstone. It expects the deal to close early in the fourth quarter.
The company has said it expects to use $1 billion to $3 billion from the proceeds of the Blackstone deal to make acquisitions in legal and accounting, but has no plans to go into new businesses.
In an interview, Chief Executive Officer Jim Smith said he was assessing potential opportunities.
“There are a couple that look quite interesting to us and we’ll continue to evaluate them,” he said.
Blackstone is making its biggest bet since the financial crisis with the $20-billion deal, which pits co-founder Stephen Schwarzman against fellow billionaire and former New York Mayor Michael Bloomberg.
In the quarter, the Financial & Risk business – now counted as a discontinued operation – grew revenues by 2 percent in constant currency to $1.55 billion.
The company’s legal business reported revenue of $882 million in the second quarter, up 2 percent when factoring out currency. The Tax & Accounting unit reported revenue of $359 million, up 4 percent when factoring out currency.
Reuters News reported $72 million in revenues, down 5 percent from a year earlier in constant currency.
Shares in Thomson Reuters have risen 12 percent since May, when they were trading at their lowest level since July 2015.
(Reporting by Matt Scuffham; Editing by Nick Zieminski)
