Market Overview

Thomson Reuters Reports Third-Quarter 2019 Results

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TORONTO, Oct. 31, 2019 /PRNewswire/ -- Thomson Reuters (NYSE:TRI) today reported results for the third quarter ended September 30, 2019.

Thomson Reuters logo. (PRNewsFoto/Thomson Reuters)

"Organic revenue growth of 4% this quarter once again demonstrates our improving trajectory and reflects the success of new AI-powered solutions and solid sales execution from our customer-facing front lines," said Jim Smith, president and CEO of Thomson Reuters. "New products are resonating with customers and helping us improve retention rates, in some cases at historically high levels."

"We are encouraged by our nine-month performance, which positions us to achieve our full-year 2019 and 2020 targets. And, the stronger and more stable characteristics of our overall business model should enable the company to sustain an attractive value creation model for shareholders, one that is driven both by growth and returns."

Consolidated Financial Highlights - Three Months Ended September 30

Three Months Ended September 30,

(Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)

(unaudited)

IFRS Financial Measures (1)

2019

  2018(2)

Change

Change at
Constant Currency

Revenues

$1,413

$1,284

10%


Operating profit

$262

$173

51%


Diluted (loss) earnings per share (EPS) (includes discontinued operations)

$(0.09)

$0.39

n/m


Cash flow from operations (includes discontinued operations)

$264

$850

-68%


Non-IFRS Financial Measures (1)





Revenues

$1,413

$1,284

10%

10%

Adjusted EBITDA

$345

$313

10%

9%

Adjusted EBITDA margin

24.4%

24.4%

0bp

-30bp

Adjusted EPS

$0.27

$0.12

125%

108%

Free cash flow (includes discontinued operations)

$126

$599

-79%


 

n/m: not meaningful

(1)       In addition to results reported in accordance with International Financial Reporting Standards (IFRS), the company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release.

(2)       The 2018 period has been revised to correct certain immaterial misstatements. For additional information, see the "Revision of Prior-Period Financial Statements" section of the news release.

Revenues increased 10% due to the inclusion of revenues paid by Refinitiv to Reuters News for providing news and editorial content, and to higher recurring revenues across all other customer segments. Foreign currency had no impact on revenue growth in the quarter.

  • Organic revenue growth was 4%, driven by a 5% increase in recurring revenues, which comprised 79% of total revenues.

Operating profit increased significantly due to a benefit from the revaluation of warrants that the company holds in Refinitiv, related to its proposed transaction with London Stock Exchange Group plc (LSEG). For additional information about the proposed LSEG transaction, see the "Recent Developments" section of this news release.

  • Adjusted EBITDA, which excludes the benefit of the warrant revaluation among other items, increased 10% and the margin was unchanged from the prior-year period at 24.4% as higher revenues were partly offset by higher expenses that included costs associated with newly acquired businesses.

Diluted loss per share reflects the company's share of losses from its 45% equity interest in Refinitiv. Diluted earnings per share of $0.39 in the prior-year period included net earnings from the Financial & Risk (F&R) business that was included in discontinued operations for the first nine months of 2018. 

  • Adjusted EPS, which excludes the above items, increased to $0.27 from $0.12 in the prior-year period, primarily reflecting fewer common shares outstanding and lower interest expense.

Cash flow from operations decreased due to the loss of cash flows from the company's former F&R business, which were included in the prior-year period, but no longer included as of October 1, 2018.

  • Free cash flow decreased for the same reason.

Highlights by Customer Segment - Three Months Ended September 30

(Millions of U.S. dollars, except for adjusted EBITDA margins)

(unaudited)



Three Months Ended







September 30,


Change



2019

 

 2018 (2)


Total

Constant
Currency

 

Organic (1)

Revenues








Legal Professionals


$605

$595


2%

2%

3%

Corporates


320

298


7%

8%

6%

Tax & Accounting Professionals


166

149


11%

10%

8%

Reuters News


155

71


120%

121%

3%

Global Print


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