Reuters Stock Falls On Slower Q2 Warning
News and information group Reuters has this morning posted a strong set of financial results that show first quarter revenues rising 17% to £970 million. However, chief executive Peter Job warned that growth in the second quarter would be at a “slightly lower rate”.
Subscription-based information products grew to £458 million, up 7% on an underlying basis, in line with growth levels achieved through 2000. Revenue growth was strong in the main economies of continental Europe and in the US.
| REUTERS REVENUE ANALYSIS – FIRST QUARTER 2001 | ||||||
| Three months to | % Change | Three months to | ||||
| 31 March | 31 March | |||||
| 2001 | 2000 | Actual | Underlying | 2001 | 2000 | |
| £m | £m | US$m | US$m | |||
| Revenue analysis by division | ||||||
| Reuters Information | 458 | 417 | 10% | 7% | 655 | 596 |
| Reuters Trading Solutions | 200 | 176 | 13% | 7% | 286 | 252 |
| Reuters Financial | 658 | 593 | 11% | 7% | 941 | 848 |
| Reuterspace | 65 | 43 | 51% | 9% | 93 | 61 |
| Instinet | 250 | 197 | 27% | 20% | 357 | 282 |
| Divisional revenue | 973 | 833 | 17% | 10% | 1,391 | 1,191 |
| Share of joint ventures revenue | 25 | 18 | 39% | 22% | 36 | 26 |
| Intra group revenue | -3 | -1 | 165% | 158% | -4 | -1 |
| Gross revenue | 995 | 850 | 17% | 10% | 1,423 | 1,216 |
| Less share of joint ventures revenue | -25 | -18 | 39% | 22% | -36 | -26 |
| Group revenue | 970 | 832 | 17% | 10% | 1,387 | 1,190 |
| Revenue analysis by type | ||||||
| Recurring | 668 | 602 | 11% | 5% | 956 | 861 |
| Usage | 266 | 211 | 26% | 19% | 380 | 302 |
| Outright | 36 | 19 | 91% | 82% | 51 | 27 |
| Group revenue | 970 | 832 | 17% | 10% | 1,387 | 1,190 |
| Revenue analysis by geography | ||||||
| Europe, Middle East and Africa | 454 | 408 | 11% | 7% | 649 | 584 |
| The Americas | 383 | 298 | 29% | 17% | 548 | 426 |
| Asia/Pacific | 133 | 126 | 5% | 4% | 190 | 180 |
| Group revenue | 970 | 832 | 17% | 10% | 1,387 | 1,190 |
Despite the results coming at the top end of expectations, shares in Reuters dipped heavily this morning as a result of the warning of slower growth in the second quarter. By 11:45am stock was down 39p (4%) at 936p.
“Revenue growth from Reuters core financial business in the first quarter continued the strong trend of the second half of last year. We anticipate that growth will continue in the current quarter at a slightly lower rate. Our business model remains robust based on repeat revenues which show no sign of eroding. The financial customer base is well diversified across many different types of institutions in over 50,000 locations worldwide,” said Peter Job in this morning’s statement.
