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By Jennifer Saba
April 29 (Reuters) - Thomson Reuters Corp’s first-quarter adjusted profit narrowly missed Wall Street expectations on Wednesday as a stronger U.S. dollar weighed on results, but organic revenues rose due to increases in its legal and tax & accounting businesses.
The news and information company showed flat revenue in its biggest division that caters to banks and other financial institutions, an improvement from quarters past.
Chief Executive Jim Smith said in an interview that the company is off to a solid start this year.
“Operationally and financially we are on track where we thought we would be,” he said.
Factoring out acquisitions and currency changes, revenue grew 1 percent during the first quarter to $3.04 billion, in line with analyst expectations, according to Thomson Reuters I/B/E/S. However, when currency changes were factored in, total revenue fell 3 percent.
The Financial & Risk division, which represents half of the company’s revenue, reported flat growth for the quarter at $1.5 billion. Sales outpaced cancellations and were positive in the Americas, Europe, Middle East and Africa and Asia.
Dan Dolev, an analyst with Jefferies, called the results at Financial & Risk “encouraging” in a note to investors.
“Thomson Reuters appears on track to deliver on its promise to post positive organic growth for the (full year) but long-term retention for Eikon remains a key debate,” he wrote, citing the flagship product for financial clients. Jefferies maintained the stock rating at “hold.”
Organic revenue at the Legal division rose 3 percent to $810 million, while at the Tax & Accounting unit organic revenue increased 7 percent to $373 million.
Thomson Reuters, which is the parent of Reuters News, is still committed to the news division, Smith said, after the departure of the division chief executive Andrew Rashbass. The company is searching internally and externally for a new CEO, he added.
Revenue at Reuters News rose 1 percent to $74 million.
Adjusted for special items, income was $353 million, or 44 cents per share, compared with $374 million, or 46 cents per share, a year earlier. Analysts had forecast EPS of 45 cents per share.
Currency reduced per-share adjusted earnings by 6 cents.
Smith said to combat currency swings the company is adequately hedged for the year and is aligning its cost base with its revenue base.
“In some ways you can’t manage around currency fluctuation when they swing that dramatically,” he said.
The news and information company reaffirmed its forecast of positive organic revenue growth for the year.
Shares of Thomson Reuters were unchanged in New York at $40.86 and in Toronto C$48.99 in morning trade. (Reporting by Jennifer Saba in New York; Editing by Nick Zieminski)