| ||
| ||
| ||
| ||
 |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Reuters revenue to fall further
LONDON, England (Reuters) -- Information provider Reuters Group Plc reported a 9.1 percent fall in first-quarter subscription revenues on Wednesday, defying the market's worst fears and breathing some more life into its bruised stock. Reuters, which sells real-time news and data to banks, brokerages and fund managers world-wide, mainly under subscription contracts, said subscription revenues would fall 11 percent in the second quarter and 10-12 percent over 2003. Reuters' major customers have begun to cancel some of their subscriptions as they slash jobs and costs to cope with the most severe downturn in stock markets in a generation. Subscription revenues account for over 90 percent of core revenues. Many media analysts had been predicting a revenue fall of at least 12 percent this year, but a fund manager said he did not expect any of them to upgrade their earnings forecasts given that the pace of the decline in turnover was still quickening. "We still have a way to go before we are out of the woods, but we may be seeing the bottom now,'' said Chris Kenny of private-client fund manager NCL Smith & Williamson, who manages about five billion pounds, including a small Reuters holding. "Many uncertainties remain,'' he added, citing market concerns over Reuters' electronic trading subsidiary, Instinet Group Inc. Instinet, whose revenues are also falling, is due to report its first-quarter results on April 22. Reuters shares surged 13 percent to a two-month high of 133 pence, also buoyed by the company's assurances over the dividend and early signs of revenue stabilisation in the United States. It later fell back to around 128p in morning trade. U.S. GLIMMERSThe stock has fallen around 76 percent over the past year, as the company shares the pain of its customers -- investment banking alone is estimated to have axed about 100,000 jobs in the past two years -- and feels the heat of intense competition. Reuters in turn has cut deep into its own cost base and plans to shed 3,000 jobs over the next three years, or almost one in five of the core Reuters workforce of 16,000. This is in addition to over 3,000 job cuts across the group since mid-2001. Finance Director David Grigson said the firm had begun to see glimmers of hope in its U.S. revenue outlook, but it was too early to say if its U.S. business had begun to turn the corner. "Our sense is that in Europe and in the UK, it's probably going to get a little bit worse before it gets better. We may have turned the corner in the U.S., but it's just too early to tell,'' Grigson told Reuters. He also said that, according to recent internal research, Reuters had grown its market share last year by two percentage points to 39 percent, while Bloomberg appeared to have increased its share by four percentage points to around 42 percent. Grigson said both Reuters and Bloomberg, which dominate the roughly $6.5 billion global information market, had taken market share mainly from smaller rivals last year. He said the market research was based on independent data and Reuters' own survey of thousands of individual clients. He stressed that the survey covered about 60 percent of the group's recurring revenue base and stripped out exchange fees, which Reuters collects and passes back to exchanges in return for distributing live market prices to customers. It also excluded usage or transaction fees and maintenance revenue. Including these other revenue streams, Reuters was likely to have more revenue overall than Bloomberg, company spokesman Simon Walker said. Unlike Bloomberg, Reuters operates across all major areas of the information market and competes at the lower-cost end with Canada's Thomson Corp. Reuters also said that user accesses -- essentially the number of information screens it has in the market -- fell five percent from the end of 2002 to 469,000 at the end of March. It said this partly reflected its move to scrap old product lines.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
