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Earnings: Reuters’ Media Revenues Down 20 Percent

Thomson Reuters (NSDQ: TRIN) is finally reaping some big benefits from its long-running merger: the news and professional information publisher reported underlying profits up 11 percent year on year to $793 million (£465.9 million) and a profit margin 330 basis points higher at 24.2 percent, helped in a big way by savings from eliminating duplicated services and staff jobs from both Reuters and Thomson. Favorable currency rates helped, too. Revenue was down 4 percent to $3.2 billion (£1.88 billion). A year ago Reuters was busy integrating itself with Thomson, which was an expensive operation — so without those costs, and with far fewer staff, it’s no wonder profits are higher a year later. But investors won’t mind either way: EPS goes up to $0.58 (£0.34) in from $0.39 in Q108 Q208, beating analysts’ estimates of $0.43.

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Investing for the upturn: CEO Tom Glocer is a glass-half-full man: speaking during the company’s Q209 earnings conference call, he admitted that things are still tough but said the worst storms of the recession are now over, or at least “things are not getting worse”. He sees the downturns as more of an opportunity: “While this environment is not easy for us… but I believe we can take share and outperform our competitors.”

Media slump, Professional steady: TR’s Media division suffered a 19 percent year on year revenue decline to $91 million (£53.4 million) — that’s at constant currencies, it’s a 6 percent underlying drop — and the division is feeling the strain from problems at just about every other consumer- and professional-facing news business, while Reuters news agency’s revenue dipped 4 percent over Q108 Q208. Content businesses only account for around 30 percent of the group’s revenue and Media contributes just 3 percent, so there isn’t too much cause for concern there. At the Professional division, which accounts for 40 percent of revenue in the quarter, revenue was flat at $1.37 billion (£804 million) — a 4 percent growth before currency movements but only 1 percent after. .

Unification: This is the company’s first results since it announced plans to de-list from the London Stock Exchange to list jointly on the New York and Toronto exchanges, therefore ending its confusing joint listing in London, in Canada and on Nasdaq. Glocer said on the call that UK investors and analysts had expressed an interest to keep investing after the switch and the company seeks approval from shareholders on Friday, before the UK High Court has its say on August 25. All being well, the process ends on September 10.

Integration savings: The company now plans to save $1 billion (£587 million) by end of 2009, up from an earlier target of $925 million. CFO Bob Daleo told investors on the call that the “vast majority of initiatives have been completed” and the rest this year won’t be more job cuts but largely “technology and product rationalization.” Daleo says TR is confident of reaching its target of $1.4 billion (£844 million) in savings by 2011.