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UPDATE 3-Thomson Reuters reports better-than-expected profit

(Adds CEO interview, analyst comment, share buyback, stock price)

July 30 (Reuters) - News and information company Thomson Reuters Corp on Wednesday reported a higher-than-expected quarterly profit on a 1 percent rise in revenue, boosted by growth in its Tax & Accounting and Legal divisions.

The company also announced a plan to buy back up to an additional $1 billion in shares through the end of 2015 after completing a $1 billion program announced last October.

Shares of Thomson Reuters rose more than 3 percent in Wednesday morning trading.

Still, market challenges remain, especially in Europe, as key customers at financial institutions and law firms reduce costs and trim staff.

"It was another quarter of steady progress, but it's still a challenging environment," Chief Executive Officer Jim Smith said in an interview.

Evercore analyst Doug Arthur described the second-quarter results as "incremental progress," noting that sales for products targeting Thomson Reuters financial customers improved despite weakness in Europe.

Smith said the company planned to direct its resources to areas of growth, including Tax & Accounting and risk and compliance products.

Adjusted for tax expenses and other special items, earnings were $415 million, or 51 cents per share, compared with $403 million, or 48 cents per share, a year earlier. Analysts on average were expecting 46 cents per share, according to Thomson Reuters I/B/E/S.

Revenue before currency changes at the company's Financial & Risk division, which caters to banks and other financial institutions, fell 2 percent to $1.65 billion. However, Thomson Reuters said net sales for the second quarter were positive, reversing negative net sales in the first quarter. Net sales, which strip out cancellations, are an important metric because they indicate future revenue growth.

Revenue rose 1 percent to $850 million at the Legal division and increased 14 percent to $324 million at the Tax & Accounting division.

The company said second-quarter revenue from ongoing businesses was $3.15 billion, compared with analysts' expectations of $3.13 billion.

The company affirmed its full-year earnings forecast and expects revenue to be unchanged from last year's $12.5 billion.

Shares of Thomson Reuters were up 3.5 percent at $38.14 on the New York Stock Exchange and rose 3.8 percent to C$41.60 on the Toronto exchange.

(Reporting by Jennifer Saba in New York; Editing by Lisa Von Ahn)