Aaron Patrick of The Wall Street Journal writes Tuesday that business news and data company Reuters, which is merging with Thomson, is likely to see lower earnings in the next few years because of the credit crisis.
“Reuters’s main clients are investment banks, hedge funds and other finance-related employers. If layoffs hit that sector in the next year, as many expect, demand could weaken for Reuters terminals, which deliver news, stock prices and trading data for hundreds or thousands of dollars a month. (Dow Jones Newswires, a unit of Dow Jones & Co., publisher of The Wall Street Journal, competes against Reuters as a provider of news.) Mr. Glocer says he hasn’t seen a sales decline. A Reuters spokeswoman declined to discuss individual clients. Reuters was hurt by the last U.S. recession, when revenue fell 17% to £3.24 billion in 2003 from 2001.
“David Anderson, owner of Atradia Consulting of London, which helps financial-information providers win bank contracts, says some plan to trim outlays on data and news.”
Read more here.
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I commend this insightful article. Who knew a company's financial performance could be impacted by the economy?
Isn't this a bit weak for the Journal? Especially considering the competitive landscape. On top of that, the last half of the article backpedals like crazy. To quote Chapel Hill's own Superchunk, "we are reaching a new low."
Agree with Captain Obvious...couldn't this story have been written about many, many mergers that are awaiting regulatory approval? Seems like a very big splash from Dow Jones and Newscorp, who compete directly with Thomson and Reuters!
Fundamental of the deal as follows ;
43 % premium for Reuters Shareholders to be exchanged with 500 Millions of stock options with which will be vested and will go to pockets of executives both companies.
Thomson family only just one place of stop over to clean up the dust.