Thomson Reuters posts profit and raises savings goal

By Robert MacMillan

NEW YORK (Reuters) - Global news and information company Thomson Reuters Corp (TRI.TO) (TRIL.L) forecast 2008 revenue growth of 6 to 8 percent and lifted its estimate of merger-related cost savings, sending its shares up about 3 percent on Thursday.

In its first earnings report as a combined company, Thomson Reuters forecast $1.0 billion (503 million pounds) in annual cost savings by the end of 2010 and $1.2 billion by the end of 2011, a schedule that the company said was earlier than it anticipated.

Included in those estimates is $750 million of integration-related cost savings, up from the $500 million that Thomson Reuters had forecast earlier.

"The results themselves seem to be in line with expectations, but what the market likes about them is the fact that they have increased their cost-savings target," said Charles Stanley analyst Sam Hart.

Thomson, a Canadian publisher of professional services databases and financial information, bought Reuters on April 17 for about $16 billion in cash and stock, hoping the merged company would be better positioned to ride out volatile global financial markets.

Analysts asked Thomson Reuters Chief Executive Tom Glocer on a conference call if he saw a "massive cliff" ahead, given the thousands of layoffs among clients. He also was asked if the financial services sector was a "ticking time bomb."

"Thomson Reuters is certainly not immune to the business cycle," Glocer responded. "But I think the fear around the financial services business has been overstated, in part because we're well positioned and in part because of the work both companies have done over the past five years to steer their franchises."

The company said its pro forma first-quarter underlying operating profit was $579 million, a rise of 37 percent from a year ago, assuming that Thomson and Reuters had been one company at the time.