Thomson Reuters, the parent company of the Reuters financial news service, reported higher first-quarter profits, but the division that operates the news service continued to post sluggish results.
Keach Hagey of The Wall Street Journal writes, “The company on Tuesday reported a profit of $314 million, or 38 cents a share, up from $250 million, or 30 cents a share, a year earlier. Revenue excluding foreign-exchange effects climbed 4% to $3.19 billion.
“The news-and-information provider continues to struggle to find solid growth in the largest segment of its business, recently reorganized under the heading Financial & Risk. Revenue increased 1% to $1.81 billion before currency effects as declines in its segments targeting traders and investors were offset by acquisitions and growth in its risk and compliance business. Operating profit in the division fell 4% excluding the impact of currency changes.
“‘In general, we’ve seen a modest uptick in the Americas offset by challenging market conditions in Europe, particularly in desktops in big sell-side banks in Europe,’ Thomson Reuters Chief Executive James Smith said in an interview. Mr. Smith said he doesn’t expect the division to show growth in net sales until the end of the year. ‘You can’t outrun gravity in the near term.’
“Weak sales in the unit, which contains the core of the division previously known as Markets, led to organizational changes and the departure of several top executives last year, including former CEO Tom Glocer. That performance had largely to do with disappointing sales of a new desktop trading product called Eikon.”
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