Revenues Flat, Profit Down for Thomson Reuters in 2016

EPS declined to $0.31 in Q4 2016, down 44% YoY from $0.55 in 2015. Excluding Q4 charges, EPS was $0.60,

Thomson Reuters (NYSE: TRI) has reported its financial metrics for fourth quarter and full year ending December 31, 2016, which displayed lower profits and flat revenues, according to a Thomson Reuters statement.

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For Q4 2016, Thomson Reuters revealed that revenues were mostly flat when weighed against their 2015 equivalent, coming in at $2.860 billion, a loss of -1.0 percent year-on-year from $2.887 billion in the same period last year. This figure was largely influenced by negative impact of US dollar strength and lower recoveries revenues. Excluding exchange rate fluctuations, revenues increased 1 percent.

Taking a full-year prospective, overall revenues took a step back at Thomson Reuters in 2016 compared to the year prior. In particular, Thomson Reuters saw a total revenue of $11.166 billion, mounting a slight decrease of -1 percent year-on-year from $11.257 billion in 2015.

By geography, revenues in Asia and the Americas were up 1 percent, while decreasing by -1 percent in Europe, Middle East and Africa (EMEA). Subscription revenues grew 5 percent (74 percent of the segment’s revenues in the quarter). However, transactional revenues declined -9 percent due to lower Legal Managed Services and Elite Transactional Revenues.

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Profit metrics are negative

In terms of Thomson Reuters’ operating profits for Q4 2016, the figure reflected a weak performance, having yielded a profit of just $294 million – this represents a loss of -32 percent year-on-year from $433 million in Q4 2015. The New York headquartered organization attributed the decrease to the fourth-quarter severance charges of $212 million. Excluding this, underlying operating profit increased 4 percent to $580 million, and the margin increased to 20.3 percent from 19.4 percent.

Another area of weakness for the quarter was Thomson Reuters’ diluted earnings per share (EPS), which declined to $0.31 in Q4 2016, down 44 percent year-on-year from $0.55 in Q4 2015. Excluding fourth-quarter charges, adjusted EPS was $0.60, an increase of 9 percent.

Across the full year interval, operating profit decreased -9 percent to $1.390 billion compared to $1.526 billion in 2015. However, diluted EPS reversed the narrative, rising to $4.13 in 2016 relative to $1.60 in the prior year. The figure was up by 158 percent year-on-year due to the $2.0 billion gain on the sale of the IP & Science business.

Finally, Thomson Reuters’ cash flow from operations, which also encompassed discontinued operations, was up by a factor of 7 percent year-on-year to $755 million from $708 million in Q4 2015.


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