Thomson Reuters Reports Strong Profit Growth, Flat Revenues for Q1 2017

Thomson Reuters (NYSE: TRI) has reported its financial metrics for Q1 2017 ending March 31, 2017, with operating revenues remaining almost flat compared with the same period of 2016, according to a Thomson Reuters statement.

For Q1 2017, Thomson Reuters revealed that revenues were mostly flat relative to a year earlier, coming in at $2.81 billion or up 1 percent from $2.79 billion reported back in Q1 2016. However, the figure was lower quarter-on-quarter by a factor of -1.6 percent from $2.86 billion in Q4 2016.

The global information provider attributed the flat change in revenues to the growth in subscription revenues and contributions from Financial & Risk’s acquisitions which offset the negative impact of US dollar strength and a decline in Financial & Risk’s recoveries revenues.

By geography, revenues in the Americas were up 3 percent and unchanged in Europe, Middle East and Africa (EMEA). Subscription revenues grew 4 percent (76 percent of the segment’s revenues in the quarter). However, transactional revenues declined 8 percent due to lower Findlaw transactional revenues which reflected difficult prior-year period comparisons.

Profit up

In terms of Thomson Reuters’ operating income for Q1 2017, the figure reversed the narrative, having yielded a profit of $444 million – this represents a jump of 43 percent year-over-year from $310 million in Q1 2016. The New York headquartered organization attributed the increase to higher revenues and lower expenses, which reflected the impact of transformation initiatives to simplify the business, as well as the favorable timing of certain corporate costs.

Another area of strength for the quarter was Thomson Reuters’ diluted earnings per share (EPS), which showed a rise of up to $0.41 in Q1 2017, a gain of 21 percent year-over-year from $0.34 in Q1 2016.

Meanwhile, Thomson Reuters’ cash flow from operations, which also encompassed discontinued operations, yielded a negative figure of $368 million in Q1 2017 due to a $500 million pension plan contribution, $86 million of payments related to the Q4 2016 severance charges, and the loss of cash flow from IP & Science following its sale.

Commenting in a recent statement on the quarterly metrics, James C. Smith, President and CEO of Thomson Reuters, said: “Today’s results demonstrate the progress we continue to make strengthening our business. It is particularly encouraging to see the investments we have made behind our most promising growth opportunities beginning to shine through on the revenue line. That growth, coupled with savings from our transformation programs, led to a significant improvement in profitability and earnings per share this quarter. We expect those trends to continue as we move through the year.”

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