News of slowing revenue growth from Thomson Reuters’ financial data business knocked down its share price. Organic revenue growth at the markets division, which accounts for 60 per cent of sales, slowed from 9 per cent in the first quarter to 7 per cent in the three months to June 30.
Tom Glocer, chief executive, said the slowdown was confined to the division’s fixed income and equities businesses, and contrasted with “very strong” growth in its treasury businesses, which benefit from foreign exchange volatility, and double-digit increases in its products serving the commodities and energy markets. Stronger sales to corporate customers, such as company investor relations departments, had “more than offset” weakness among investment banking clients.
Enterprise sales had been strong as large institutions sought to “re-engineer” their trading operations. The professional division, which includes the former Thomson Corp’s West legal, tax and accounting, scientific and healthcare businesses, produced organic revenue growth of 6 per cent, with strong demand for Westlaw’s litigation support products. The group had achieved savings with an annualized value of $490m from integration programs by June 30, at a cost of $154m, with job cuts and early moves to offer Thomson Financial products to former Reuters customers and vice versa.
Source: The Financial Times
BIIA Newsletter September 2008 Issue