Thomson Reuters sees flat 2014 revenue; Q4 results miss
By Jennifer Saba
NEW YORK (Reuters) - Thomson Reuters Corp TRI.N(TRI.TO: Cotización) forecast that revenue would be flat in 2014 and reported worse-than-expected fourth-quarter results, as financial customers in Europe and Asia cut back on spending and the legal business weakened in Latin America.
Shares of the global news and information company fell more than 5 percent to a four-month low on Wednesday afternoon, as Wall Street analysts said it would likely take another year for the business to turn around.
Thomson Reuters Chief Executive Officer Jim Smith said headwinds at the end of 2013 were stronger than anticipated, and he expected financial markets to remain "challenged" for some time to come as the global banking system restructures.
"It's still a volatile time everywhere," Smith said in an interview. "We did see more weakness in Europe and in Asia than we expected in the fourth quarter."
The company reported a net loss of $343 million (206 million pounds) in the quarter, compared with a net profit of $368 million in the year-earlier period. It attributed the loss to a $275 million restructuring charge from previously announced job cuts, a higher tax rate, and a 3 percent drop in revenue.
Excluding the charge, earnings per share came to 49 cents, down from 54 cents a year ago. On that basis, it was below the average analyst estimate of 52 cents, according to Thomson Reuters I/B/E/S.
About one-half of Thomson Reuters revenues come from banks and other financial institutions, and about one-quarter from the legal profession. Both sectors have been trimming costs and consolidating. For instance, Barclays Plc (BARC.L: Cotización), Britain's third-biggest bank, said on Tuesday it would slash 12,000 jobs this year.
"It appears that 2014 is going to be another year in the turnaround process," Piper Jaffray analyst Peter Appert said of Thomson Reuters. "It's taking longer and (is) a bit more painful than anticipated." Continuación...