Reuters Posts Revenue Beat but Sales Drop on Weak U.S. Dollar

Reuters Group posted a forecast-beating 6.5% rise in Q1 revenue, but said actual revenue fell 1.1% after accounting for currency fluctuations including a weak U.S. dollar. Actual revenue fell to €626 million from €633 million a year ago, during which the dollar fell 12% against the pound; forecasts had been for revenue of €623-€626. Revenue at its sales and trading unit, which accounts for over 65% of its income, was down 4%. Analysts were impressed with the underlying growth, but said they expected to shave future forecasts to account for further currency fluctuations. Reuters global market share for financial information in 2006 was 27%, a 'small improvement' from 2005. CEO Tom Glocer said the company was 'well positioned' to follow through on its full-year expectations for organic revenue growth of 6%+. Shares were up 0.7% in London trading, and have gained 8.7% in 2007.

Sources: Reuters, Bloomberg
Commentary: Reuters Group: ValueAct Capital Raises Stake • Reuters Invests in Pluck, Commits To Blogs • Reuters, CME Team Up To Open Spot Currency Exchange
Stocks/ETFs to watch: Reuters Group PLC (RTRSY). Competitors: Dow Jones & Company Inc. (DJ), THOMSON CORP (TOC), Track Data Corp. (TRAC), Interactive Data Corp. (IDC), Morningstar Inc. (MORN)

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