Sales in Thomson Reuters’ media operations were dented, as the group saw top-line operating profit tumble 32 percent to $378 million on four percent lower sales of $3.2 billion.
July-to-September sales in the unit, part of its markets division, dipped 14 percent from last year to $90 million, blamed on “continued challenges in professional publishing and the advertising-driven consumer business“.
And the unit’s agency content business saw sales dip six percent, thanks to “consolidation in traditional media outlets” and generally quieter business.
But the media unit represents only three percent of group revenue, and the Q3 across the group’s broad portfolio gives a great snapshot of the state of the industry…
— Markets: The bigger of the two divisions, sales slid six percent (to $1.86 billion) due to “flow-through from weaker year-to-date net sales”, though Thomson-Reuters (NYSE: TRI) integration savings and cutbacks helped operating profit up 10 percent (to $369 million). Subscription revenue fell 0.7 percent; investment advisory sales dipped five percent as investment and wealth managers continued to exercise caution.
— Professional: Sales grew just 0.4 percent, hit by print and enterprise software sales falling in the legal unit. But stronger revenue showings in tax-and-accounting and healthcare-and-science buoyed the division.
CEO Tom Glocer, in the earnings call: “Although we believe we’re past the bottom of economic activity, our reported year-on-year figures have gone negative. But we expect this dip to be shallow and limited to the next few quarters. This is a direct result of the mathematics of our subscription model … The market is improving, though clients remain cautious nonetheless.
“No-one is spending a penny on things that they don’t absolutely need … I’m looking for the cancellation activity to abate.”
“You will continue to see attrition in print; we have that baked in to our numbers going forward.”
CFO Robert Daleo: “We can already see our way clear to the other side.”
|3Q 09||3Q 08||Estimate|