Earnings: Reuters’ Media Revenues Up; More Restructuring

Reuters’ first half 2005 revenues were announced today and the group reported its first sales gain in three years and said it will expand in India and China. The shares posted the biggest drop in two years on concern costs of the strategy will erode earnings.

The London-based company plans to expand in new markets and accelerate the introduction of electronic trading. CEO Tom Glocer surprised investors with the 185 million GBP cost of his expansion plan. The spending may drag down 2006 profit by as much as 20 percent, said analysts at UBS AG and Investec Securities.

Reuters’ media division, which includes Reuters.com and other new media efforts, had about 7% of Reuters total revenue for the half, was up by an underlying 6% (4% on an actual basis) to GBP 74 million (H1 2004: GBP 70 million). “Revenue growth from advertising on the reuters.com family of websites largely offset the impact of rationalising online syndication products.” Translation: Reuters.com is doing better than the online syndication strategy.

Detailed earnings report here

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