U.S. News

Reuters First-Half Profit Beats Forecasts, Sales Strong


News and information provider Reuters Group, which is being taken over by Canadian publisher Thomson Corp, posted a higher-than-expected interim trading profit and said sales were strong.

"Against the backdrop of the pending Thomson-Reuters transaction, Reuters stayed focused on driving growth in the first half and delivered the strongest six months of sales and installations in more than five years," Reuters Chief Executive Tom Glocer said in a statement on Friday.

Reuters said it expected the formal filing of the Thomson deal with European competition authorities in September following pre-filing discussions.

First-half trading profit rose to 175 million pounds ($358.8 million) from 156 million a year ago. Reuters said currency effects, mainly the weakening of the dollar against sterling, had reduced trading profit by 25 million pounds.

A Reuters poll of six analysts forecast trading profit of 169 million pounds, inside a 164 to 171 million pound range.

Reuters defines trading profit as operating profit from continuing operations before restructuring charges, acquisitions, impairments and amortisation as well as profits from disposals and Thomson-related deal costs.

Group revenue in the six months to end-June eased to 1.268 billion pounds from 1.277 billion last year. Reuters said the fall of 0.7% was due to currency effects and on an underlying basis revenue rose by 6.4%.

A poll of seven analysts expected revenue of 1.272 billion, inside a 1.262-1.277 billion pound range.

Adjusted earnings per share rose 25% to 10.6 pence, above the average 9.2p forecast by a poll of six analysts.

Reuters said because it was in an offer period it was not giving any revenue or margin guidance for 2007.

On Thursday, Canadian-based electronic publisher Thomson said the two companies were making good progress in obtaining the required regulatory approvals for the acquisition.

The companies announced in May that Thomson had agreed to buy London-based Reuters for what was then about $17.2 billion in cash and stock to create the world's leading provider of news and data for professional markets.

Reuters said its capital expenditure in the first half was 126 million pounds, underpinned by spending on new product development and data centres.

The company expects full year capital expenditure to be similar to last year's 228 million pounds.