Thomson Reuters third-quarter sales dip on strong dollar

By Jessica Toonkel

reuters - Thomson Reuters Corp on Friday reported third-quarter sales that missed estimates due in part to the strong dollar, but the news and information company's profits beat Wall Street expectations.

Shares were down more than 1 percent in early New York trading.

Third-quarter net earnings were $293 million, or 36 cents per share, compared with $250 million, or 28 cents per share, a year ago.

Adjusted for special items, earnings were 52 cents per share. Analysts, on average, were looking for 49 cents per share, according to Thomson Reuters I/B/E/S.

Thomson Reuters, which is the parent of Reuters News, competes for financial customers with Bloomberg LP, as well as News Corp's Dow Jones unit.

The company was able to beat expectations despite the dip in revenue because it has remained focused on keeping expenses down, said Sanford Bernstein analyst Claudio Aspesi.

"They have been driving costs very aggressively," he said.

Operating profit margin increased to 19 percent from 17.1 percent a year ago.

Overall revenue from ongoing businesses fell 4 percent to $2.98 billion, but was up 1 percent when factoring out currency. Analysts were expecting $3.04 billion.

The company reaffirmed its full-year profit forecast.

This summer's global stock market selloff put pressure on sell-side financial services firms, the core customers of the Financial & Risk business. Since their peak this year in late July, U.S, financial shares are down more than the broader U.S. market.

"The large banks had a particularly hard quarter (in Q3)," said Jim Smith, chief executive of Thomson Reuters. "To the extent that we can help banks take out costs and manage their complexity and risk, that's an opportunity for us."

In its Financial & Risk segment, which provides news and analytics to financial services companies, revenue fell 7 percent to $1.5 billion but was flat when stripping out currency. Margins improved.

The division's net sales were positive in all regions except Europe, the Middle East and Africa, marking the sixth consecutive quarter the division has seen positive net sales.

A significant recent development on Wall Street was the launch of Symphony Communications Services LLC, a cloud-based messaging platform backed by a number of banks that went live in September.

Smith said Thomson Reuters is open to linking its own messaging to Symphony's. "We believe an open solution is the ultimate answer," Smith said, "We are willing to continue to talk to anyone about progress toward that solution."

Smith said Thomson Reuters expects to announce a replacement by year-end for Andrew Rashbass, who departed as the head of Reuters News in April.

(Reporting By Jessica Toonkel; Editing by Nick Zieminski)