Thomson Reuters 2020 outlook steady as Q2 profit exceeds estimates

Thomson Reuters Corp reported higher-than-expected second quarter profit on Wednesday and reaffirmed its 2020 forecast in the face of global market uncertainty.

The news and information provider, which owns Reuters News, said sales in the company's legal, tax and corporate businesses are expected to rise in the current quarter.

"Results in the second quarter illustrate the resilience in our business," Chief Executive Steve Hasker, who joined Thomson Reuters this year, said in an interview.

The company was about two-thirds through a 2020 cost-cutting program, which is focused on external costs, such as consultants and travel and entertainment, and targets $100 million in savings, Chief Financial Officer Michael Eastwood added.

"We will achieve it on discretionary expenses," Eastwood said.

The company's New York-listed shares were 0.3 per cent lower at 1445 GMT, while its Toronto-listed shares were down 1.3 per cent.

Thomson Reuters said it saw no significant disruptions from the coronavirus crisis, adding that its 500,000 legal, tax and other professional clients were able to access its services online, working from home.

It said quarterly revenue dipped 1 per cent to $1.405 billion and operating profit fell 18 per cent to $365 million, from $447 million a year ago, when the quarter included some one-time items.

Adjusted earnings of 44 cents per share were ahead of the 38 cents analysts expected, according to Refinitiv, while sales met Wall Street expectations.

Thomson Reuters expects higher free cash flow for the year, between $1 and $1.1 billion, and said its three main divisions should grow sales by 3 per cent-4 per cent in the third quarter.

Of its three largest divisions, Legal Professionals and Corporates showed higher quarterly sales and adjusted profit, while the Tax & Accounting Professionals segment saw lower sales and adjusted profit, partly reflecting a delayed US tax filing season during the pandemic.

Reuters News saw organic revenues fall 11 per cent, reflecting the effect of the coronavirus crisis on its events business. The news division's sales are forecast to be lower in the third quarter and for the full year.

Hasker said merger and acquisitions activity has been muted during the pandemic but may pick up in 2021.

"We have a healthy list of companies we monitor," he said.