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Thomson Reuters profit beats on cost-cutting

The Thomson Reuters logo is seen inside the lobby of the company building in Times Square, New York October 29, 2013. REUTERS/Carlo Allegri
The Thomson Reuters logo is seen inside the lobby of the company building in Times Square, New York October 29, 2013. REUTERS/Carlo Allegri

By Jennifer Saba

(Reuters) - Thomson Reuters Corp reported higher-than- expected quarterly earnings, bolstered by cost-cutting, as revenue edged higher mainly because of acquisitions.

The global news and information company said on Wednesday that earnings per share for the first quarter were 46 cents, excluding amortization and other items. That was ahead of a 38-cent forecast by analysts polled by Thomson Reuters I/B/E/S.

"We are going in the right direction, and we expect to see continued steady improvement," Chief Executive Officer Jim Smith said in an interview. "We have turned the ship, but there is still a lot of work to do."

The majority of Thomson Reuters' revenue comes from financial institutions and law firms, two challenged sectors that have been trimming costs and slashing headcount in recent years.

Smith said the Financial & Risk business was still under pressure from restructuring at large European banks, although sales in North America, Latin America and Asia had improved.

In those regions, overall sales minus cancellations grew during the first quarter.

Revenue in the Financial & Risk division decreased 1 percent to $1.6 billion. The division, which accounts for more than half of Thomson Reuters' total revenue, sells its flagship desktop product, Eikon, to bankers, retail brokers and other financial professionals.

The company said revenue in the Legal division, known for its Westlaw legal database, rose 2 percent to $803 million, lifted by acquisitions last year like information provider Practical Law.

Revenue in the Tax & Accounting division increased 13 percent to $348 million.

Overall revenue from ongoing businesses increased 1 percent to $3.1 billion, in line with analysts' estimates.

"Cost-cutting remains impressive, but there is still limited visibility on a recovery in revenue growth," TD Securities analyst Vince Valentini wrote in a note to investors. "Headline profit results seemed to be well ahead of expectations, but this was only because of a shift in the timing of preannounced restructuring costs."

Net income for the first quarter was $292 million, compared with a loss of $17 million a year earlier.

Thomson Reuters affirmed its full-year outlook and expects revenue to be unchanged from last year's $12.5 billion.

(Reporting by Jennifer Saba in New York; Editing by Lisa Von Ahn)

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