Thomson Reuters profit beats, finance unit shows growth

Wed Jul 29, 2015 1:02pm EDT
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By Lewis Krauskopf

(Reuters) - Thomson Reuters Corp (TRI.N: Quote) (TRI.TO: Quote) on Wednesday reported higher-than-expected quarterly profit as the company's biggest division that serves banks and financial institutions showed underlying revenue growth for the first time since 2011.

Revenue at its Financial & Risk segment rose 1 percent in the second quarter when excluding currency and acquisitions.

"It was very encouraging to see organic growth in F&R," said Jefferies analyst Dan Dolev. "Everybody has been waiting for it. They delivered it."

Thomson Reuters shares, which had been down more than 6 percent in 2015 through Tuesday, rose 4 percent after the results, their best one-day move in about four years.

The news and information company posted underlying revenue increases across its four main divisions.

"The quarter and the first half just confirms the momentum that is building inside the business," Chief Executive Jim Smith said in an interview.

Thomson Reuters has struggled to expand since Thomson Corp acquired Reuters Group Plc in 2008, a $17 billion merger that was completed just as the financial industry crisis started.

More recently, since the end of January, U.S. financial shares .SPSY have outperformed the broader market .SPX. Much of that optimism has come from investors preparing for the Federal Reserve to raise interest rates, boosting the rates at which banks can lend and therefore their profits.   Continued...

The Thomson Reuters logo is seen inside the lobby of the company building in Times Square, New York October 29, 2013.   REUTERS/Carlo Allegri