Thomson Reuters lifts sales outlook on back of earnings beat

By Kenneth Li and Nick Zieminski

NEW YORK (Reuters) -Thomson Reuters Corp reported better-than-expected results in the second quarter with higher sales across its main divisions, and raised its annual revenue forecast.

Underscoring its upbeat outlook, fueled by a recovering global economy, the global news and information company said on Thursday it would buy back up to $1.2 billion of its shares.

The company said it is monitoring whether the spread of the Delta variant of COVID-19 is affecting its businesses.

“We do not think that there is a significant financial impact for our customers, and therefore for us through the rest of this year,” Chief Executive Steve Hasker said, adding that the course of the pandemic was unpredictable.

The Thomson Reuters print and events businesses are among the areas most vulnerable in case of a worsening of the COVID-19 situation, Chief Financial Officer Michael Eastwood said.

Thomson Reuters, which is the parent company of Reuters News, said its total revenues rose 9% to $1.53 billion, compared to expectations of $1.5 billion.

Adjusted earnings per share of 48 cents also topped analyst expectations, based on data from Refinitiv, marking the fifth consecutive quarter that Thomson Reuters’ adjusted earnings topped Wall Street estimates.

Operating profit was down 14% to $316 million, reflecting one-time gains in the year-ago quarter.

Thomson Reuters’ three main divisions, Legal Professionals, Tax & Accounting Professionals, and Corporates, showed higher sales, led by a 15% revenue gain in the tax group, excluding currency fluctuations. On that basis, the Reuters News segment saw sales up 6% to $168 million in the quarter.

All the divisions are expected to show higher sales in the third quarter, and total revenue for 2021 is now seen rising 4% to 4.5%, Thomson Reuters said, marking the second increase to sales guidance this year.

Thomson Reuters executives said in an interview after the results that it has spent $90 million of an estimated $500 million to $600 million investment as part of its Change program to shift from a portfolio company into an operating company.

It expects to spend the rest by the end of 2022.

The executives said $700 million remained of a $2 billion mergers and acquisitions budget and there was a “robust” pipeline of targets in the automation, small-to-medium sized cloud-based and software-as-services businesses, and companies that help improve customer experiences.

The London Stock Exchange Group in January closed a $27-billion deal data and analytics company Refinitiv that was part of Thomson Reuters until 2018. Thomson Reuters holds a minority stake in LSE which was worth $7.5 billion as of Aug. 4.

(Writing by Nick Zieminski; Editing by Carmel Crimmins and Alexander Smith)

By Kenneth Li and Nick Zieminski

NEW YORK (Reuters) -Thomson Reuters Corp reported better-than-expected results in the second quarter with higher sales across its main divisions, and raised its annual revenue forecast.

Underscoring its upbeat outlook, fueled by a recovering global economy, the global news and information company said on Thursday it would buy back up to $1.2 billion of its shares.

The company said it is monitoring whether the spread of the Delta variant of COVID-19 is affecting its businesses.

“We do not think that there is a significant financial impact for our customers, and therefore for us through the rest of this year,” Chief Executive Steve Hasker said, adding that the course of the pandemic was unpredictable.

The Thomson Reuters print and events businesses are among the areas most vulnerable in case of a worsening of the COVID-19 situation, Chief Financial Officer Michael Eastwood said.

Thomson Reuters, which is the parent company of Reuters News, said its total revenues rose 9% to $1.53 billion, compared to expectations of $1.5 billion.

Adjusted earnings per share of 48 cents also topped analyst expectations, based on data from Refinitiv, marking the fifth consecutive quarter that Thomson Reuters’ adjusted earnings topped Wall Street estimates.

Operating profit was down 14% to $316 million, reflecting one-time gains in the year-ago quarter.

Thomson Reuters’ three main divisions, Legal Professionals, Tax & Accounting Professionals, and Corporates, showed higher sales, led by a 15% revenue gain in the tax group, excluding currency fluctuations. On that basis, the Reuters News segment saw sales up 6% to $168 million in the quarter.

All the divisions are expected to show higher sales in the third quarter, and total revenue for 2021 is now seen rising 4% to 4.5%, Thomson Reuters said, marking the second increase to sales guidance this year.

Thomson Reuters executives said in an interview after the results that it has spent $90 million of an estimated $500 million to $600 million investment as part of its Change program to shift from a portfolio company into an operating company.

It expects to spend the rest by the end of 2022.

The executives said $700 million remained of a $2 billion mergers and acquisitions budget and there was a “robust” pipeline of targets in the automation, small-to-medium sized cloud-based and software-as-services businesses, and companies that help improve customer experiences.

The London Stock Exchange Group in January closed a $27-billion deal data and analytics company Refinitiv that was part of Thomson Reuters until 2018. Thomson Reuters holds a minority stake in LSE which was worth $7.5 billion as of Aug. 4.

(Writing by Nick Zieminski; Editing by Carmel Crimmins and Alexander Smith)