(Adds comments from Thomson Reuters executive)
By Kenneth Li
Nov 3 (Reuters) - Thomson Reuters Corp said
its third quarter revenue rose on gains in its legal and
corporates divisions, as cost cuts helped lift its 2020 free
cash flow outlook.
The news and information company said Tuesday's results gave
it "increasing confidence" for its full-year financial forecast,
but that the course of the COVID-19 pandemic could change this.
Thomson Reuters, which owns Reuters News, said in a
statement that its quarterly revenue rose 2% to $1.44 billion,
while its operating profit rose 21% to $318 million.
"I’m very pleased to report our markets and businesses
continue to prove resilient in the face of a challenging broader
macro-environment," Chief Executive Steve Hasker said.
Thomson Reuters said its adjusted earnings before interest,
tax, depreciation and amortization (EBITDA) rose 42% in the
third quarter as a result of higher revenue and a
pandemic-related $100 million cost cutting program.
"I'm confident we will continue to effectively manage
through this challenging environment and build on this
performance in 2021," Hasker added in the statement.
Thomson Reuters executives said after the results that the
company was ahead of its cost cutting target and planned to
reinvest in its core businesses during the fourth quarter.
Chief Financial Officer Michael Eastwood said in an
interview that Thomson Reuters was still evaluating acquisition
targets and could announce a deal this year or early in 2021.
The company has about $700 million to spend as part of a $2
billion budget to fund expansion in its legal, tax and
accounting businesses.
Thomson Reuters' adjusted earnings of 39 cents per share
were ahead of the 38 cents analysts expected, according to IBES
data from Refinitiv, while the company's quarterly revenue was
also slightly above Wall Street expectations.
The Legal Professionals, Tax & Accounting Professionals and
Corporates divisions all had higher organic quarterly sales and
adjusted profit.
Thomson Reuters said its results were boosted by strong
sales from Practical Law, Westlaw Edge and its European and
Canadian businesses and a revenue increase from the tax division
after a U.S. tax filing deadline extension from April to July.
Organic revenues at the Reuters News division slipped 2%,
reflecting a decline in the agency business and the ongoing
impact of the coronavirus crisis on its events business.
Thomson Reuters reaffirmed its full-year guidance of revenue
rising by 1% to 2% and raised its free cash flow forecast to
about $1.1 billion, at the higher end of the previous outlook.
The company also confirmed that London Stock Exchange's
purchase of the Refinitiv data and analytics business is
expected to close in the first quarter of 2021.
The sale will give Thomson Reuters, which holds a 45% stake
in Refinitiv, a 15% stake in the LSE, worth an estimated $9
billion, which it plans to sell within five years to reinvest in
its core businesses.
(Reporting by Kenneth Li;
Editing by Alexander Smith)
