Thomson Reuters (NYSE: TRI) reported second-quarter earnings that topped Wall Street expectations. The company said its revenue rose 6% as it aggressively deployed artificial intelligence technology across its portfolio for its customers.
The company now forecasts full-year revenue at the high end of projections or a rise of about 7%.
The Toronto-based content and technology company reported quarterly revenue of $1.74 billion, up from $1.65 billion a year earlier. Wall Street had expected $1.75 billion in the quarter, according to LSEG data.
Shares on the Toronto Stock Exchange opened down 1.4% at C$220.47 and down 1% on the New York Stock Exchange at $160 per share.
Steve Hasker, President and CEO, said in an interview after publishing financial results, “We remain highly encouraged by the customer reaction to our new AI-driven products” that include generative AI products such as Westlaw AI and CoCounsel.
CoCounsel is a chat-based generative AI (GenAI) assistant that can help draft documents, sift through research, and locate information scattered across different sources for legal professionals.
Technology company investors have questioned whether the euphoria over the productivity and cost-saving benefits of the new technology popularized by OpenAI’s ChatGPT and Microsoft’s Copilot services are actually translating to usage across workforces.
Thomson Reuters (NYSE: TRI) Chief Financial Officer Mike Eastwood said the company would begin providing a new generative AI-type metric to help directly address questions on customer usage of new products.
“So far so good,” Eastwood said, pointing to the company’s sales forecast as an indication of its confidence level in generative AI yielding returns.
In a survey of 2,200 professionals in industries served by Thomson Reuters (NYSE: TRI) that the company published in early July, it estimated AI could save workers 12 hours per week or about 200 hours annually by 2029.
Operating profit fell 50% to $415 million, falling short of expectations of $463 million. The 2023 period included a $347 million gain on the sale of a business. Adjusted earnings, excluding one-time items, came it at 85 cents per share, versus 82 cents expected.
Revenue in the company’s “Big 3” segments comprised of legal, tax and accounting, and corporates, rose 7%.
Reuters News revenue rose 7% on growth in its agency business and contractual price increases with the London Stock Exchange.
The company completed a $1 billion share buyback program in the second quarter. It has also sold off the remaining stake in LSEG it jointly owned by a Blackstone consortium, generating gross proceeds of $600 million.
Executives said capital expenditure as a percentage of revenue, or what it calls capital intensity, is expected to remain at 8.5% this year and at around 8% for 2025 and 2026.
The company has $8 billion to spend on acquisitions.
(Source: Reuters)
