Tax & accounting sales drive Thomson Reuters profit

(Reuters) - Thomson Reuters Corp's quarterly results beat analysts' expectations as the company racked up strong software sales to tax professionals, accountants and financial institutions looking to comply with government regulations.

The company's Tax & Accounting unit posted a 31 percent rise in first-quarter revenue to $310 million, citing growth in the United States and Latin America and through acquisitions like property and real estate tax software Manatron.

While Thomson Reuters' business serving the financial industry remained under pressure from layoffs and other cost cuts at banks, its overall results were lifted by the Tax & Accounting and Legal divisions.

The global news and information provider reported on Tuesday that first-quarter adjusted earnings per share rose to 44 cents, up from 37 cents a year earlier and above the average analyst forecast of 41 cents per share, according to Thomson Reuters I/B/E/S. Shares rose 1.8 percent to $30.37 in New York trading.

"Everything seems to be working in line or better than expected and that is really good news," said Claudio Aspesi, an analyst with Sanford Bernstein.

Thomson Reuters said first-quarter revenue at its Financial & Risk division, which serves financial institutions, grew 1 percent to $1.8 billion, as declines in sales to traders and wealth managers were offset by increases in sales to risk and compliance customers, as well as acquisitions.

"I am really pleased with how the team has responded and the progress we are making inside the company," Thomson Reuters Chief Executive James Smith said. "The biggest challenges right now are outside the company, the macroeconomic environment, particularly in Europe."

EIKON IN 16,000 DESKTOPS

Total revenue from ongoing businesses grew 4 percent before currency changes to $3.19 billion, above the analysts' average forecast of $3.13 billion.

The legal unit, which includes WestlawNext and competes with Reed Elsevier, Wolters Kluwer and Bloomberg, reported 3 percent revenue growth to $777 million.

One of Thomson Reuters' key financial products, Eikon, has struggled to gain traction with customers. The company, which competes with Bloomberg, FactSet, Interactive Data Corp and News Corp's Dow Jones for financial and banking customers, said that Eikon desktops now total over 16,000, up 30 percent from the fourth quarter.

Smith said net sales for Financial & Risk in the first quarter were a "slight improvement" over the fourth quarter. Revenue is a lagging indicator for Thomson Reuters since its subscription sales are based on annual or multi-year contracts.

"There was no further reset on the Financial & Risk business -- the turnaround continues," Evercore Partners analyst Doug Arthur said, noting that and the rise in legal revenue were the two highlights of the results.

The first quarter reflects a new reporting structure that was put in place after a major reorganization resulted in the exit of several high-level executives including former CEO Tom Glocer.

Smith, who headed the company's former Professional division, stepped into the role of chief executive at the beginning of the year.

The new organization was aimed at simplifying the company created by Thomson Corp's acquisition of Reuters Group Plc in 2008. The company now reports revenue in the following units: Financial & Risk, Legal, Tax & Accounting, Intellectual Property & Science, and Corporate & Other.

Thomson Reuters said underlying operating profit rose 2 percent to $545 million. Underlying operating profit margin fell to 17.1 percent, from 17.4 percent a year ago, due to higher depreciation and amortization from new product launches, the company said.

The company affirmed its 2012 forecasts, including revenue growth in the "low-single digits."

Last week the company announced the sale of its Healthcare business for $1.25 billion.

On the Toronto exchange, the shares rose 1.1 percent to C$30.00.

(Reporting By Jennifer Saba, editing by Tiffany Wu)

  • Treasure trove of British newsreels reveals Top Gear's ancestors 3 hours ago
    Treasure trove of British newsreels reveals Top Gear's ancestors

    Long after television grew to dominate American and British homes, newsreel producer British Pathé kept at it, documenting the news of the day until finally ceasing production of new short films in 1970 after 60 years of effort. Last week, all of British Pathé's 85,000 films were put online — including dozens of fascinating, rare and often weird car films that resemble nothing so much as a jet-age Top Gear.

  • Nissan tests self-cleaning paint that could make car washes obsolete 4 hours ago
    Nissan tests self-cleaning paint that could make car washes obsolete

    During this vile, never-ending winter, motorists had three options to keep their cars clean: Shell out on regular car washes; slave away in the cold, wind and snow washing it yourself, or screw it and just drive a dirty car. I, like many, chose the last option. But if only I'd been able to test Nissan's self-cleaning car, all my troubles would have washed away.

  • Popular hot yoga myths debunked 11 hours ago
    Popular hot yoga myths debunked

    What’s the hottest new workout taking the world by storm? That would be hot yoga, also known as Bikram yoga. Conducted in a heated room with sweltering temperatures of about 40°C (or approximately 104° Fahrenheit) and 40 per cent humidity, … Continue reading →

  • Photo of a very thin Lee Kuan Yew sparks concern
    Photo of a very thin Lee Kuan Yew sparks concern

    A new picture of Singapore's first prime minister, Lee Kuan Yew, who is now 90 years old, has drawn concern from people on Singapore's internet space.

  • Waste oil collector struggles after STOMP posts, receives help from kind souls
    Waste oil collector struggles after STOMP posts, receives help from kind souls

    After being photographed at work in Jurong pooling used oil near coffee shops, 50-year-old Valerie Sim has been struggling to keep her family afloat. Web portals STOMP and The Real Singapore published pictures of her in February, triggering a witch hunt for others like her and comments from readers like “Who knows if they’ll use it as cooking oil?” Some readers also said they filed police reports against her and other people they believed were doing the same thing she was.

  • I tendered my resignation without securing the next job. Here’s why I don’t mind.
    I tendered my resignation without securing the next job. Here’s why I don’t mind.

    I have committed a taboo – I have tendered my resignation without securing the next job. The reactions to the announcement were varied but they all pretty much hint at a deep sense of disapproval. “Why did you do that?” It was as if I had renounced my faith. “What are you going to do from now on?” Almost as though a misfortune had incapacitated me. “What does your family have to say about it?” As if I had offered to cook for the next family dinner. I was, and still am, certain of my reasons and motivations for the resignation. However the response I received got me thinking about why people are so concerned about the gaps in their careers. The developed world evolved from an agricultural economy to an industrial economy to the service age, then to the knowledge economy in the late 1990s and 2000s marked by breakthroughs in technological innovations and competition for innovation with new products and processes that develop from the research community. According to The Work Foundation, the knowledge economy is driven by the demand for higher value added goods and services created by more sophisticated, more discerning, and better educated consumers and ... The post I tendered my resignation without securing the next job. Here’s why I don’t mind. appeared first on Vulcan Post.