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Thomson Reuters president and CEO James Smith expects revenue to rebound.MARK BLINCH/Reuters

Thomson Reuters Corp. intends to cut 2,500 jobs, or about 4 per cent of its total global staff, in 2013. The cuts will come from its struggling financial and risk division.

The company's revenue and margin forecast for 2013 failed to impress Wall Street and the shares fell 2.4 per cent, overshadowing bullish remarks from chief executive James Smith that his turnaround plan was gaining traction.

The global news and information company posted a better-than-expected rise in quarterly profit on Wednesday and forecast that revenue would increase in the low single digits this year. The outlook was largely anticipated by analysts, who had forecast a 2 per cent rise.

The margin for earnings before interest, tax, depreciation, and amortization is expected to be in the range of 26 per cent and 27 per cent in 2013, lower than the 2012 performance of 27.4 per cent.

"It looks like another year where the overall growth will be muted," said Claudio Aspesi, a senior analyst at Sanford Bernstein & Co.

Mr. Smith said the company was halfway through his turnaround plan because of product improvements and stabilization in Europe and that he expects revenue to rebound. "The success we are having today doesn't start showing up until next year," Mr. Smith said in an interview.

"It's like night and day. We are in a different place."

Mr. Smith said he expected Financial & Risk net sales to turn positive in the second half of the year. This an important gauge of future performance because subscription-based revenue typically lags sales by 12 months.

Financial & Risk, which accounts for 54 per cent of total revenue, has struggled in recent years following a troubled launch for its flagship desktop product Eikon, which is aimed at bankers, hedge fund managers, and other financial industry professionals.

Cost cutting by banks after the financial crisis compounded the difficulties, especially in Europe.

Mr. Smith said the company expects to cut 2,500 jobs in the Financial & Risk division, or about 4 per cent of its total global staff, in 2013. The company said it plans to spend $100-million (U.S.) in severance this quarter.

"At the end of the day, 2012 was supposed to be a transition year and now they are talking about 2013," said Swami Shanmugasundaram, an analyst with Morningstar.

Thomson Reuters said revenue from ongoing businesses in the fourth quarter rose 2 per cent before currency changes to $3.36-billion, roughly in line with expectations. It was not immediately clear what the change in costs was on the same basis.

Adjusted earnings increased to $497-million, or 60 cents per share, from $445-million, or 54 cents per share, a year earlier, beating analysts' average forecast for 55 cents per share, according to Thomson Reuters I/B/E/S.

Profit in the quarter increased on the back of "continued cost containment and lower reorganization costs", the company said. Organic revenue was flat.

"They have worked very hard on cost and the efforts should be acknowledged," Aspesi said.

The number of Eikon desktops installed rose 33 per cent in the fourth quarter from the previous quarter to 33,900.

For the fourth quarter, revenue at the Financial & Risk division increased 1 per cent due to growth in its Governance, Risk & Compliance business and its acquisition of electronic foreign exchange platform FXall.

Revenue in the division's Europe, Middle East and Africa region and in Asia was down 3 per cent, respectively, while the Americas gained 6 per cent.

At its legal division, which includes WestlawNext, revenue rose 2 per cent in the quarter to $861-million. Thomson Reuters recently acquired London-based Practical Law Company, which provides guidance and analysis tailored to specific areas of the law.

Full year revenue at Thomson Reuters rose 3 per cent to $12.89-billion. Bloomberg LP, which competes with Thomson Reuters on many fronts but gets the bulk of its revenue from terminal sales to financial institutions, said on Wednesday that revenue for 2012 rose 4.5 per cent to $7.9-billion.

The board approved a 2-cent annual dividend increase to $1.30 per share.

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