* Q4 adjusted EPS 43c vs forecast 46c
* Invested $25 mln to better position company for 2022
* Sees 2022 revenue growth of 5% vs 4.5-5.0% previously
* Shares fall 3.5% in morning trading
(Adds shares, analyst comment, detail from conference call)
By Kenneth Li and Nick Zieminski
NEW YORK, Feb 8 (Reuters) - Thomson Reuters Corp
missed fourth-quarter earnings forecasts on
Tuesday as the news and data provider stepped up investments it
said would help deliver stronger-than-expected revenue growth
this year and next.
The parent company of Reuters News reported adjusted
earnings fell to 43 cents per share from 54 cents a year
earlier. That was 3 cents below Wall Street expectations,
according to data from Refinitiv.
Edward Jones analyst Matt Arnold called it a "mixed
quarter," with better than expected revenue offset by weaker
profits. The Toronto-based company is well placed to grow
earnings given stable demand for its products, but the shares
already reflect those positives, he said in a note to clients.
The stock was down 3.5% in early New York and Toronto
trading.
Thomson Reuters, which owns the Westlaw legal database and
the Checkpoint tax and accounting service, said it invested $25
million in the quarter on additional sales and marketing
resources, product development and data analytics.
Chief Executive Steve Hasker said the company was in a
strong position to tap into trends emerging in the economic
recovery from the COVID-19 pandemic.
"Customers (are) increasingly realizing the value of our
content and tools in a hybrid working world that’s affected by
accelerating complexity," he said in an email to staff.
Total revenues rose 6% in the quarter to $1.71 billion,
ahead of analyst expectations, according to estimates from
Refinitiv.
The company now sees revenue growth of around 5% this year,
versus 4-5% previously, and expects to grow 5.5-6.0% in 2023,
versus 5-6% before.
While information services stocks continue to show resilient
growth, they have lagged the broader market in 2022 as investors
have switched to companies with more scope for recovery in
profits as the pandemic abates, Edward Jones' Arnold said.
Thomson Reuters' U.S.-listed shares are down about 16% this
year versus a 4% drop for the S&P 500. The company's
peers include RELX Group’s LexisNexis, Bloomberg LP,
News Corp's DowJones, and Wolters Kluwer NV.
BILLIONS TO SPEND
Thomson Reuters is mid-way through a two-year $600 million
investment into a "Change Program" to transform itself from a
holding company of different businesses to a more focused,
content-driven technology company.
"We'll continue to look at acquisitions to supplement our
existing assets to help drive organic growth in 2022 and 2023,"
Chief Financial Officer Michael Eastwood told Reuters in an
interview, adding the company potentially had "billions"
available for deals.
CEO Hasker told analysts on a conference call: "We don't
need transformational acquisitions."
The company raised its annual dividend by 10% to $1.78 per
share.
The three main divisions - Legal Professionals, Tax &
Accounting Professionals, and Corporates - reported quarterly
sales up between 5% and 9%, but only the tax segment saw higher
adjusted earnings before interest and other items (EBITDA).
The Reuters News division showed double-digit increases in
both sales and adjusted EBITDA.
Thomson Reuters swung to a diluted loss per share of 36
cents in the quarter and posted a 73% drop in operating profit
to $257 million, due to higher costs and a boost in the year
earlier period from the sale of an investment.
The company also said it had to pay $80 million to UK tax
authorities by March, but that it was disputing the demand. It
gave no further details.
Reuters News makes more than half its revenue from supplying
news to Refinitiv, a data company spun off from Thomson Reuters
and now owned by the London Stock Exchange (LSE).
Thomson Reuters holds a minority stake in the LSE following the
deal, worth about $7 billion as of Monday, the company said.
(Writing by Nick Zieminski in New York
Editing by Mark Potter)
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