Media and information services provider Thomson Reuters released its financial reports for the first quarter of 2018 today. The firm saw a slight increase in year on year revenues but a decline in operating profits.
Commenting on the release of the reports, Reuters’ CEO and president Jim Smith said: “We are encouraged by the best first-quarter performance in several years with each business having performed at or above our expectations. The health of our Q1 results gives us even greater conviction in our ability to stay focused on the opportunities at hand.”
The company had a turnover of $1.33 billion in the first quarter of 2017 which increased to $1.38 billion for the same quarter of this year. This was equal to an approximately 4 percent increase in year on year revenue.
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As the dollar has experienced around 2.2 percent inflation since the end of last year’s first quarter, Reuter’s stated growth in revenues should be taken with a small pinch of salt. The company claims that the firm experienced a more positive impact from foreign currency revenues and that the increase in constant currency terms was actually equal to 3 percent.
Increasing revenue – decreasing profits
Despite growth in revenues, Reuters saw shrinking year on year operating profits. This year’s operating profits were $268 billion, down from $274 billion in the first quarter of last year.
Reuters claimed that the discrepancy was down to an investment gain experienced in the first quarter of last year. The investment gain bolstered last year’s results but has made this year’s results look comparatively worse.
Reuters estimates that it will experience an effective tax rate of between 14 to 16 percent for 2018. If that is the case, then net profit for the first quarter would be approximately $227.8 million.