Thomson Reuters Corporation (NYSE:TRI) (TSE:TRI) (TSE:TRI-B) reported a 7 percent decline in their first-quarter operating profit owing to severance costs and a fall in revenues from Financial & Risk division. The information company spent $78 million on severance cost in the quarter and also took a tax charge for $235 million. In February, the company reported that there would be $100 million in severance costs for about 2,500 job cuts.
For the first quarter, revenues from ongoing businesses were up 2 percent to $3.1 billion, excluding currency changes, primarily due to its Legal and Tax & Accounting divisions. Revenues were in line with analyst expectations. Thomson Reuters posted a net loss of 4 cents per share compared to earnings of 35 cents in the year-earlier period. On an adjusted basis, earnings came in at 38 cents against 39 cents a year ago.
Revenues from Financial & Risk division, excluding acquisitions, divestitures, and currency changes, were down 3 percent, owing to negative net sales due to cancellation of subscriptions in 2012.
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“The first-quarter performance was consistent with our full-year expectations and I am pleased with the positive trajectory of the business as we begin the year,” said James C. Smith, chief executive officer of Thomson Reuters.
The global news company, which was formed after a $17 billion acquisition of Reuters Group Plc by Thomson Corp., is in a transition phase. The acquisition, which happened during the peak of the financial crisis in 2008, forced many of the company’s clients to slash costs and cut staff. Adding to the woes was the premature launch of its flagship desktop product Eikon.
The company revealed, for the first quarter, sale of Eikon desktops totaled nearly 47,000, an increase of 38 percent from the previous quarter.
As was announced previously, Thomson Reuters Corporation (NYSE:TRI) (TSE:TRI) (TSE:TRI-B) increased the annual dividend by $0.02 per share to $1.30 per share for 2013. A quarterly dividend of $0.325 per share is payable on June 17, 2013 to common shareholders of record as of May 23, 2013. For the first quarter, the company did not buy back any of the shares. However, until April 29, 2013, the company repurchased 4.3 million shares of the total authorized up to 15 million shares, under the Normal Course Issuer Bid (NCIB) program.
Despite the decline in earnings, the company reaffirmed its outlook for the remaining of the year, expecting revenue growth in the low single digits.
On Monday, shares of the company touched a year high at $33.74 on the New York Stock Exchange.