Thomson Reuters Crushes Estimates In 1Q; Shares Pop 6%

Shares of Thomson Reuters Corp (TRI) were up more than 6% in early trading Tuesday after the provider of business information services reported first-quarter results that beat analysts’ estimates. The company’s revenue and profit were higher than expected, helped by gains in its three main divisions and a booming economy.

Indeed, Thomson Reuters’ total revenues came in at $1.58 billion for the quarter ended March 31, an increase of 4% from $1.52 billion in the prior-year quarter. This beat consensus estimates by $20 million.

Meanwhile, profit was $5.04 billion ($10.13 per diluted share) in 1Q 2021, up from $193 million ($0.39 per diluted share) in 1Q 2020. The higher profit was due to the sale of its investment in Refinitiv to the London Stock Exchange Group.

On an adjusted basis, which excludes the sale of Refinitiv as well as other adjustments, Thomson Reuters earned $0.58 per share, up from $0.48 in the prior-year period. Analysts expected EPS of $0.42 per share.

Thomson Reuters’ President and CEO Steve Hasker said, “Our first-quarter performance reflects a strong start to the year, and we are encouraged by the momentum we see building. Our customers are more confident in an improving economic environment and those positive prevailing tailwinds were reflected in strong sales across our businesses. Despite the improving outlook, risks remain as the pandemic is still significantly impacting many parts of the world. However, we are encouraged by the first quarter’s results, and our increasing confidence is reflected in our new outlook for the second quarter and the increase to the low end of our revenue outlook for the full year.”

Revenues are forecast to grow between 5.5% and 6.5% in the second quarter. (See Thomson Reuters Corp stock analysis on TipRanks.)

Yesterday, RBC Capital analyst Drew Mcreynolds maintained a Buy rating on the stock. He raised its price target to $100 (C$122.89) for a 4.7% upside potential.

Overall, the consensus on the Street is that TRI is a Moderate Buy based on 7 Buys and 3 Holds. The average analyst price target of C$126.98 implies an 8% upside potential from current levels. Shares have jumped by more than 15% year-to-date.