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Thomson Tax & Accounting Revs Up

Stephane Bello, Thomson ReutersThe strong year for Thomson Reuters' Tax & Accounting business stayed strong in the third quarter ended September 30 with operating profit up 26 percent on a 13-percent rise in revenue. The company says all segments of the operation showed revenue growth with organic growth up 9 percent.


Operating profit for Tax & Accounting was $43 million, up from $34 million in last year's corresponding period. Revenue for the unit was $301 million in the most recently ended period, compared to $270 million a year earlier.

CFO Stephane Bello noted in a recent earnings webcast that the operating margin for the business was down 50 basis points "because of investments we are making in our highest growth business." The company reported that both the corporate and professional sections of Tax & Accounting had 11 percent organic growth. Corporate revenue comprised 44 percent of the total; professional 20 percent.

Company-wide results were not so favorable. Net earnings dropped to $250 million in the third quarter, a decrease of 13.2 percent from $283 million. Revenue dipped by one percent to $3.11 billion in the most recently ended quarter from $3.09 billion a year ago. Foreign exchange rates—the stronger dollar—had a higher-than-normal impact.

But the story continued to be the company's and analysts' emphasis on the financial and risk business. CEO James Smith said that, "s expected revenue growth was negative in the financial business. Nevertheless our financial business continues to make good growth." He said net sales were positive for all regions in the financial and risk segment for the first time since Thomson purchased Reuters in 2008.

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