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Thomson Reuters Corp. clamped down on spending in the second quarter to offset a modest drop in revenue and report better-than-expected profit, as its core business lines kept growing despite pressure from the pandemic.

The news and information provider reported positive sales and steady renewal rates for its key subscription products, which account for more than 80 per cent of the company’s revenue. Thomson Reuters said it is ahead of schedule on a program to cut US$100-million in costs this year – mostly from travel, entertainment and consulting fees – which has helped counteract sharp declines in demand for its events business and print products.

Second-quarter revenue was US$1.4-billion, down 1 per cent from a year ago. With a large share of revenue for the balance of the year locked in by subscription agreements, the company reaffirmed its 2020 targets, which include boosting revenue by 1 per cent to 2 per cent, and raised its forecast for free cash flow to between US$1-billion and US$1.1-billion.

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At the same time, new chief executive officer Steve Hasker is turning his attention to revamping the company’s operations and making investments to bolster its three main businesses, which serve professionals in the legal, corporate and tax sectors.

Mr. Hasker took the reins in March and will lead Thomson Reuters as it adjusts to a smaller, more focused corporate structure after selling a majority stake in its financial and risk division in 2018, which was spun out as a new company, Refinitiv. The London Stock Exchange is now buying Refinitiv, and the deal is expected to close this year or early next year.

In an interview Wednesday, Mr. Hasker said that over the next three to four years he intends to “turn Thomson Reuters from a holding company to an operating company,” refining and standardizing an array of disparate technologies, systems and data centres to form a more cohesive unit.

In July he made two key hires, bringing in former HSBC Group executive Kirsty Roth as chief operations and technology officer and Toronto-based David Wong, who mostly recently worked at Facebook Inc. as chief product officer.

“We have an opportunity to go across the different units, look for places in which we can make some investments in technology … and fundamentally improve the way that we serve our customers by taking advantage of our scale,” Mr. Hasker said.

For the three months ended June 30, Thomson Reuters earned US$126-million, or 25 cents a share, compared with US$180-million, or 36 cents, a year ago.

Adjusted for certain items, Thomson Reuters said it earned 44 cents a share, ahead of analysts’ consensus estimate of 38 cents a share, according to data from Refinitiv.

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

In the division catering to legal professionals, revenue increased 3 per cent to US$620-million as the company integrated two smaller companies it acquired, HighQ and Pondera Solutions. Revenue from corporate clients was up 6 per cent to US$329-million thanks to higher recurring revenues and a boost from deals made in 2019.

The tax and accounting division suffered a rare decline in revenue, which fell 8 per cent to US$168-million owing to a delay in pay-per-return tax filings after the United States extended its federal tax filing deadline. The division saw about US$6-million in revenue in the third quarter; if that money had been counted in the second-quarter results, as it would have in a normal year, tax and accounting revenue would have risen 3 per cent, the company said.

Reuters News revenue fell 1 per cent to US$155-million, and the division suffered a steep drop in revenue from in-person events that were postponed. And print product revenue fell 19 per cent to US$134-million as shipments were put on hold while staff in governments, courts and law firms work remotely.

Thomson Reuters is still looking to make smaller acquisitions to complement its three main business lines. “We do have the dry powder,” Mr. Hasker said. “We just continue to diligently chip away at that list of potential targets.”

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