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Thomson Reuters Corp. nudged its outlook for the year higher after first-quarter revenue increased faster than expected as the news and information provider benefits from early signs of recovery in the U.S. economy.

Total revenue rose 4 per cent compared with the same period a year earlier to US$1.58-billion, which was an encouraging start to a two-year transformation plan aimed at accelerating growth that the company announced earlier this year.

Thomson Reuters now expects revenue to rise by 3.5 per cent to 4 per cent this year, compared with previous guidance of 3 per cent to 4 per cent. That is partly because of growing confidence about the pace of vaccinations and economic reopening in the United States, where Thomson Reuters generates 80 per cent of its revenue.

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Yet as other countries such as India, Brazil, Argentina and even Canada struggle to combat resurgent spread of COVID-19, company chief executive Steve Hasker tempered his optimism with caution about lingering uncertainty over the global economy.

“That caution and optimism varies depending on which region of the world we’re talking about,” Mr. Hasker said in an interview on Tuesday.

His plan to reshape Thomson Reuters includes simplifying and streamlining the business to improve customer service, and making increasing use of artificial intelligence, machine learning and cloud-based software products to get the most out of the company’s vast libraries of data and content. Thomson Reuters plans to spend up to US$600-million on its change program, including US$300-million to US$350-million this year. But it will also cut US$600-million in costs by 2023, reinvesting a third of those savings in the business.

First-quarter results were boosted by a large gain on the sale of its stake in financial data provider Refinitiv to the London Stock Exchange Group (LSEG). For the three months that ended March 31, profit was US$5-billion, or US$10.13 a share, compared with US$193-million, or 39 cents a share, in the same quarter last year.

Adjusted to exclude that gain and other special items, Thomson Reuters said it earned US$288-million, or 58 cents a share. On average, analysts expected adjusted earnings per share of 42 cents, according to Refinitiv.

Woodbridge Co. Ltd., the Thomson family holding company and controlling shareholder of Thomson Reuters, also owns The Globe and Mail.

Revenue from the largest Thomson Reuters division, which caters to legal professionals, increased 7 per cent to US$668-million in the first quarter, or 5 per cent after adjusting for the impact of currency fluctuations. The business line serving large corporate clients saw revenue rise 5 per cent to US$384-million, or 4 per cent in constant currency. And revenue from the tax and accounting division was US$225-million, up 3 per cent year over year, or 5 per cent excluding currency effects.

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Reuters News revenue was up 3 per cent to US$160-million. The company recently announced it will begin charging readers for news on its website, which receives 41 million unique visitors each month. Mr. Hasker said the company has “conservative” expectations about how much revenue the new strategy will generate in the near term, but readers’ willingness to pay for high-quality news has increased. “We saw that as an opportunity,” he said.

As expected, Thomson Reuters sold US$1-billion of its LSEG shares in mid-March, and will use the proceeds to pay its tax bill from the Refinitiv sale.

Thomson Reuters now owns 72.4 million shares in LSEG, worth about US$7.4-billion as of May 3. As a lock-up agreement expires in stages from 2023 to 2025, the company could sell its stake and add to an already-large war chest reserved for making bolt-on acquisitions to bolster its three key business lines, which serve legal, corporate, and tax and accounting customers.

Demand for technology has boomed in the pandemic, so prices to acquire tech companies have also risen. As Thomson Reuters eyes potential deals, “what that’s meant for us is that the bar is just a bit higher in terms of our rigour,” Mr. Hasker said.

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