Revenue Down, Profit Up for Thomson Reuters in 2016 Second Quarter

The financial data and information company announced a slight drop in Q2 revenues due to a stronger U.S. dollar.

Thomson Reuters (NYSE: TRI) has reported its financial metrics for Q2 2016 ending June 30, 2016, which were emblematic of higher profits and lagging revenues, according to a Thomson Reuters statement.

For Q2 2016, Thomson Reuters revealed that revenues pointed lower, coming in at $2,769 million, a loss of -1.0 percent YoY from $2,802 million in Q2 2015. This figure was largely influenced by negative impact of U.S. dollar strength and lower recoveries revenues. Excluding exchange rate fluctuations, revenues increased 1%.

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By geography, revenues in Asia and the Americas were up 1%, while decreased 5% in Europe, Middle East and Africa (EMEA). Subscription revenues grew 4% (73% of the segment’s revenues in the quarter). However, transactional revenues declined 4% due to lower Findlaw transactional revenues which reflected difficult prior-year period comparisons.

Profit metrics are positive

In terms of Thomson Reuters’ operating profits for Q2 2016, the figure reversed the narrative, having yielded a profit of $401 million – this represents a jump of 16 percent YoY from $345 million in Q2 2015. The New York headquartered organization attributed the increase to the favorable changes in fair value and the benefit of lower common shares outstanding.

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Another area of strength for the quarter was Thomson Reuters’ Diluted earnings per share (EPS), which orchestrated a rise up to $0.39 in Q2 2016, up 50 percent YoY from $0.26 in Q2 2015. However, Thomson Reuters’ cash flow from operations, which also encompassed discontinued operations, was down by a factor of -19 percent YoY to $770 million from $951million in Q2 2015.

Commenting in a recent statement on the quarterly metrics, James C. Smith, President and CEO of Thomson Reuters, said: “Our core business showed resilience and we continued to make progress throughout the second quarter despite a challenging backdrop and turbulent market conditions for many of our largest customers.”

“We are tracking to our full-year target and are well positioned to help our customers navigate the global trends affecting their industries,” he added.

Thomson Reuters recently announced plans with CME Group to integrate their two instant messaging networks networks, Thomson Reuters Eikon Messenger and CME Pivot Instant Messaging, to create a communication group of 300,000 market participants.

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