TORONTO — Diversified information company Thomson Reuters (TSX:TRI) expects to return to solid revenue growth by the second half of 2010 as the economy recovers and the company launches several new products.
Speaking at the company’s annual shareholders’ meeting Friday, CEO Thomas Glocer said the company’s sales began to recover at the end of 2009 and this “firmed up and accelerated into the first quarter of 2010.”
“It was our second consecutive quarter of total company positive net sales and our underlying operating profit and cash flow were strong and our (earnings per share) well ahead of consensus,” Glocer said.
“We were able, on that basis, to reconfirm our 2010 outlook, which includes our view that we should return to revenue growth in the second half of this year.”
The company’s top line will be boosted by the launch of several new products this year, including two that have yet to be released — Eikon, a new desktop for the financial services industry, and the OneSource Global Tax Workstation software for accountants.
These launches follow the release of legal search engine WestlawNext in February, data distribution network Elektron in April, and video news service, Insider, earlier this week.
“While many companies had to slash their R&D budgets just to be able to survive the recession, we had the financial strength and determination to keep investing in product development,” Glocer said. “...These investments are now beginning to bear fruit and it’s very exciting.”
“I strongly believe that the combination of improving market conditions that we see now, new flagship offerings and scalable infrastructure, positions our company very well to grow and deliver shareholder value in 2011 and beyond,” he added.
At the meeting, Thomson Reuters’ shareholders voted in favour of the way the company’s top executives are compensated.
The company said the results of the vote would be released next week. Last year, 17.7 per cent voted against top executives’ pay packages. About 53 per cent of the company’s stock is owned by the founding Thomson family.
Glocer also addressed an ongoing labour dispute with 400 of the company’s journalists in New York. Thomson Reuters and the Newspaper Guild of New York began contract negotiations in October 2008 but talks have reached an “impasse,” he said.
The union has accused Thomson Reuters of trying to impose an illegal pay cut on its members, but the company disputes this.
Glocer said he was still hopeful the two sides can reach a negotiated settlement but added “we have to be tough on costs.”
Last week, Thomson Reuters reported a first-quarter profit of US$134 million, or 15 cents per share, down from $193 million, or 23 cents per share, including discontinued operations in the first quarter of 2009.
Adjusted earnings per share, a more closely watched measure of the company’s profitability, was equivalent to 36 cents, beating analyst expectations of 30.6 cents.
The per-share amount was down from 40 cents a year earlier.