By Nick Zieminski and Kenneth Li
NEW YORK (Reuters) – Thomson Reuters reported higher quarterly sales and operating profit that fell slightly short of Wall Street estimates on Tuesday, while cutting its full-year sales outlook due to disruption to the global economy from the coronavirus crisis.
The company, controlled by Canada’s Thomson family, said it was targeting a $100 million cost reduction program and noted it has no debt due until 2023. It said it has enough liquidity for the next 12 months and does not expect to change its dividend.
The news and information provider, parent of Reuters News, reported a 2% rise in first quarter revenue to $1.52 billion, helped by gains in its legal and corporates businesses, and said operating profit rose 6% to $290 million.
Adjusted earnings of 48 cents a share were 1 cent below Wall Street expectations, according to Refinitiv.
Thomson Reuters forecast 1%-2% total revenue growth this year, below its February estimate of 4.5%-5.5%, saying its business of selling information and software solutions electronically and on a subscription basis was not immune to the recent global economic downturn.
“We don’t plan any layoffs at this point in time,” Steve Hasker, Chief Executive of Thomson Reuters, said in an interview. “We are focused on investing in our business.”
Michael Eastwood, Chief Financial Officer of Thomson Reuters, said the company would continue to seek buyout opportunities as part of a $2 billion acquisitions budget.
Executives said they would take a “methodical” approach to evaluating potential targets that may come up at the end of this year or early next year.
The company has spent $1.3 billion through the beginning of the year and Hasker said any purchases would be considered “bolt-ons” to existing businesses and not in new sectors.
The coronavirus pandemic has brought major economies to a halt, pushed millions into unemployment as businesses shutter, and emptied trading floors around the world as companies scrambled to slow its spread among their workers.
Many of Thomson Reuters’ own 24,000 employees have been working remotely during the outbreak.
Reuters News revenues were flat at $155 million, while organic revenues fell 4% due to COVID-19 related cancellations of events in the Reuters Events business, the company said.
Thomson Reuters, whose executives have said that they were aiming to cut discretionary expenses, also expects the sale of data company Refinitiv to close in the second half of the year.
The London Stock Exchange said last month it was committed to completing its $27-billion takeover of Refinitiv, in which Thomson Reuters has a 45% stake, in the second half of 2020, with no plans to revise its savings targets as a deep recession looms.
Thomson Reuters in February appointed former Nielsen president Hasker as its new CEO, succeeding Jim Smith.
Smith, a former journalist who oversaw a period of major change at the company, will stay on for a transition period and become chairman of the Thomson Reuters Foundation.
(Writing by Nick Zieminski in New York; Editing by Jason Neely and Alexander Smith)