Thomson Reuters Corp. is still feeling the impact of the recession, but the company says it is now on the cusp of growth.
Thomson Reuters, a provider of news services and legal, health-care and financial information, is still reporting sluggish subscription sales from 2009, which show up in its results months later.
But the company's medical, tax and accounting information businesses are showing signs of picking up. Last year "was the bottom of the cycle for us in terms of economic activity, and 2010 was the bottom in terms of reported results," chief executive officer Tom Glocer told analysts on a conference call Thursday. "While our markets are only slowly improving, we expected and have seen accelerated results in terms of revenues, net sales, and customer uptake of our new products."
Some of the decline was because of investment in new products, such as a tax service for multinational corporations and new services for traders and health care professionals, which will be launched by the end of the year and will help to fuel growth in the future.
The company has said previously that it expects to show positive growth in the second half of the year, and reaffirmed that on Thursday. In a research note, UBS analyst Phillip Huang said the business is continuing to grow and also expects revenue to increase in coming months.
Thomson Reuters reported net income of $297-million (U.S.) or 35 cents per share in the quarter ended June 30. This was down from year-earlier earnings of $325-million., or 38 cents per share.
Revenues for the quarter totalled $3.2-billion, down 2 per cent from $3.3-billion a year earlier.
Revenues were up 2 per cent at the company's professional division, which sells information to the legal, tax and accounting, and health-care and science industries. Overall revenue in that division rose to $1.39-billion from $1.37-billion in the same period in 2009.
However, that was offset by a decline of 4 per cent, to $1.83-billion from $1.9-billion, in the markets division, which provides services to the financial and media industries.
While overall the professional division improved, revenues from legal services were up only slightly.
"Some firms did disappear in this recession and although they're quite stable, they're not cutting heads any more; we've yet to see a strong recovery in legal, which I think will be slow," Mr. Glocer said.