By Kenneth Li
NEW YORK (Reuters) - Thomson Reuters beat first-quarter revenue forecasts, lifted its financial outlook for 2024 and raised its annual dividend by 10% on Thursday as it continued to invest heavily in artificial intelligence.
Shares in the Toronto-based news and information provider rose by as much as 5.67% to a record high of C$220.23 after it reported an 8% rise in quarterly revenue.
The shares were up 5.27% at C$219.40 in Toronto at 1533 GMT, heading for their largest one-day rise since August 2021, data from LSEG's Workspace platform showed.
Thomson Reuters reported quarterly revenue of $1.88 billion, up from $1.74 billion a year earlier. Wall Street had expected $1.85 billion in the quarter, LSEG data showed. The company also raised its annual dividend to $2.16.
Thomson Reuters said its operating profit rose 10% to $557 million, just short of expectations of $559 million, while its adjusted earnings per share, excluding one-time items, were $1.11 per share. Wall Street had expected 95 cents per share.
Thomson Reuters CEO Steve Hasker said in an interview after the company reported its results that he was optimistic AI investments would pay off over time, but added it was early days and "too early to declare victory."
Hasker cited good take-up of new AI-powered products including CoCounsel, an AI assistant initially targeted at legal professionals. It is now being rolled out to other customers in the media, tax, risk and fraud businesses.
Thomson Reuters, which said it now has an $8 billion budget to acquire companies primarily, but not exclusively, focused on AI, has closed two deals in the quarter. They are Sweden-based business automation company Pagero and World Business Media Unit, an insurance industry media company.
The company raised its annual total revenue forecast as a result of its first-quarter performance and now expects it to rise by between 6.5% and 7%, up from 6.5%.
It forecast total revenue from its big three business segments of legal, tax and accounting and corporates, to rise by between 8% and 8.5%, up from 8%.
Thomson Reuters legal division revenue growth of 1% was hit by lower transaction revenue due to the sales of some divisions.
It said its corporates division's revenue rose 16%, which included the impact of the Pagero purchase.
The tax and accounting division's revenue rose 17% as it benefited from seasonal strengths, where 60% of revenues are in the fourth and first quarters.
Reuters News revenue rose 21% to $210 million, from the non-recurring transactions from content licensing deals related to generative AI. The company did not disclose the partners. Organic revenue in the news division rose by 17%.
Thomson Reuters said it had sold 10.1 million shares of London Stock Exchange Group during the quarter for $1.2 billion. It said it had sold 1.6 million LSEG shares on May 1 and after completion of that sale it would own 4.3 million shares in LSEG.
It said it had also repurchased $350 million of Thomson Reuters common shares as part of a $1 billion buyback program which ends in the second quarter of this year.
(Reporting by Kenneth Li in New York; Additional reporting by Amanda Cooper in London; Editing by Alexander Smith)
