Thomson Reuters Fourth-quarter Profit Tops Estimates
Thomson Reuters Corp on Thursday reported higher-than-expected earnings in the fourth quarter, helped by cost cuts and gains on divestitures, but said a weakening global economic environment was a concern.
The news and information company reported adjusted earnings of 73 cents per share, ahead of analyst forecasts for 65 cents, according to estimates from Refinitiv.
Thomson Reuters, which owns the Westlaw legal database and the Checkpoint tax and accounting service, said "many signs" pointed to a weakening global economic environment amid rising interest rates, high inflation, and geopolitical risks.
It expects first-quarter organic sales growth at the lower end of its full-year target of 5.5-6.0%. That organic sales range matches the forecast made in November.
"As our results and guidance shows, we're proving to be every bit as resilient as we indicated and have traditionally been," CEO Steve Hasker told Reuters in an interview.
Total revenues rose 3% in the fourth quarter to $1.765 billion, slightly ahead of expectations of $1.760 billion, according to Refinitiv. Exchange rate moves reduced the sales growth by 2 percentage points, and divestitures by 1 point.
Four of the company's five business segments showed higher sales and operating profit, but those were lower in the Global Print business.
The Reuters News division showed total sales up 7%, primarily driven by the Reuters Events business and the company's news agreement with the Data & Analytics business of LSEG. As of Jan. 31, Thomson Reuters owned about $5.6 billion worth of LSEG shares.
The company completed its two-year Change program to save on costs. After it completes a $2 billion share repurchase program in the second quarter, the company said it planned to return $2 billion in capital to shareholders and possibly conduct a share stock split. It raised its dividend for the 30th straight year.
During the fourth quarter, Thomson Reuters said it would buy SurePrep LLC, a U.S.-based provider of tax automation software and services, for $500 million in cash. That deal was completed at the start of January.
Hasker said the company had about $11 billion in capacity for deals and expected to pursue a couple this year, including adding more to its artificial intelligence capabilities.
"We've made significant investments over the last couple of years in AI. It powers many of our products," he said.
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