(Reuters) - Thomson Reuters Corp (TRI.N) (TRI.TO) on Tuesday reported higher-than-expected quarterly earnings on improved results in its main business of providing news and analytics to financial companies.
Sales in the Financial & Risk division, which accounted for about half of the company’s total revenue, outpaced cancellations for the eighth straight quarter. Thomson Reuters, whose shares rose more than 2 percent in New York and Toronto, said the unit’s net sales were positive overall.
“It’s encouraging to see the continued progress in our results despite the volatility and uncertainty in the external markets,” Chief Executive Officer Jim Smith said in an interview.
Sliding commodity and oil prices, worries about the Chinese economy and uncertainty about U.S. interest rates have put pressure on Financial & Risk customers. U.S. financial shares .SPSY have lagged the broader U.S. market .SPX this year.
“We are selling solutions that help customers reduce their costs and do a better job managing the increasingly complex regulatory environment,” Smith said. “Nothing in this environment makes those needs less.”
Thomson Reuters, parent of Reuters News, competes against Bloomberg LP and News Corp’s (NWSA.O) Dow Jones unit for financial customers.
Michael Formuziewich, a portfolio manager with Toronto-based Leon Frazer & Associates, expressed confidence that Thomson Reuters would fare well even with continued market volatility, given its plans to continue to manage costs.
“For the most part, the growth in earnings for Thomson Reuters in the next year are things they have control over,” said Formuziewich, whose firm owns shares of the company.
Excluding special items, first-quarter earnings were 48 cents per share, compared with 39 cents a year earlier. Analysts on average were expecting 44 cents, according to Thomson Reuters I/B/E/S.
Revenue increased 1 percent to $2.79 billion from a year earlier before factoring in currency changes, but it fell 1 percent when they were included.
The analysts’ average estimate was $2.81 billion.
The company affirmed its 2016 revenue outlook of low single-digit percentage growth.
Financial & Risk revenue fell to $1.51 billion from $1.55 billion as more companies that distribute content through Thomson Reuters opted to bill customers directly.
Revenue at the Legal division rose 2 percent to $822 million, but was down 2 percent when factoring in currency fluctuations. Tax & Accounting revenue increased 8 percent to $389 million but fell 4 percent when currency changes were included.
Thomson Reuters said in February that it expected to sell its Intellectual Property & Sciences business in the second half of the year. The company put out its confidential information memorandum to interested parties two weeks ago, Smith said.
Reporting by Jessica Toonkel; Editing by Lisa Von Ahn