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The news and information provider reported a 2-per-cent rise in revenue, to US$1.52-billion.

Carlo Allegri/Reuters

Thomson Reuters Corp. reported resilient first-quarter earnings as subscription revenue helped insulate the company from the economic damage done by the novel coronavirus, but lowered its revenue targets for the rest of the year.

The news and information provider reported a 2-per-cent rise in revenue, to US$1.52-billion, as stronger revenue from its core businesses serving legal and corporate professionals offset weaker results from its print products and live events offered by Reuters Events. Thomson Reuters generates 80 per cent of its revenue from subscriptions, many of which only renew every two to three years, serving as a buffer against near-term volatility.

Yet the company now expects revenue to rise by only 1 per cent to 2 per cent this year, down from a projected 4.5 per cent to 5.5 per cent before the coronavirus pandemic. Sales will be lower, chief financial officer Mike Eastwood said, but cancellations are not expected to outpace new subscriptions. And the company plans to update its guidance again in August.

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Thomson Reuters is navigating the COVID-19 pandemic under a new chief executive, Steve Hasker, a former executive at Nielsen Holdings. He formally took over from predecessor Jim Smith in mid-March, just as the global economy entered an unprecedented lockdown to curb the spread of the virus.

“We’re focused on investing in our business and fulfilling our growth aspirations and ... coming out of this crisis stronger than we went in," Mr. Hasker said in a telephone interview on Tuesday. “I see lots of opportunities for growth within [our] core franchises."

For the first three months of 2020, Thomson Reuters reported profit of US$193-million, or US 39 cents a share, compared with US$104-million, or US 20 cents a share, a year ago.

Adjusted for certain items, the company said it earned US 48 cents a share, narrowly missing analysts’ consensus estimate of US 49 cents a share, according to Refinitiv.

Thomson Reuters does not expect any changes to its dividend, but will not buy back any shares in the short term.

The company will cut US$100-million in costs in 2020, mostly by slashing “discretionary” spending on travel and expenses, as well as consulting fees, Mr. Eastwood said. At this point, the company doesn’t plan to cut jobs.

“Quite the opposite," Mr. Hasker said, "we are looking pretty aggressively at attracting great talent, especially in [artificial intelligence] and software development.”

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For now, Thomson Reuters is still on the hunt for what Mr. Hasker described as “logical bolt-on acquisitions,” and has at least US$700-million available to buy other companies. And after selling multiple businesses in recent years, including a controlling stake in the financial and risk division that became Refinitiv – which is now being sold to the London Stock Exchange Group for US$27-billion – Thomson Reuters does not plan any more divestitures, Mr. Eastwood said.

The Reuters News division, which posted flat first-quarter revenue of US$155-million, is expected to see full-year revenue fall by 4 per cent to 6 per cent. Nearly all in-person events run by Reuters Events are postponed through August as a result of the coronavirus, wiping out US$25-million in expected second-quarter revenue. “There will be a way to reinvent [the events] industry," Mr. Hasker said, but “it will never be the same again."

Legal division revenue increased 5 per cent to US$626-million, bolstered by clients signing up for WestLaw Edge, a legal research platform that generates higher margins than older products. Revenue from corporate clients rose 7 per cent to US$367-million, partly because of acquisitions. And tax and accounting revenue was unchanged at US$218-million, after the release of tax software was moved up to the fourth quarter of 2019.

Revenue from print products, which was already in decline as companies shift increasingly to digital alternatives, fell 5 per cent to US$155-million, as shipments were delayed because of the coronavirus.

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