Reuters revenue dips in Q1 but better expected in Q2

International media group Reuters saw revenue for the three months to March 31, 2004 fall 10.7% to £598m (€895m).

On an underlying basis, adjusting for the impact of acquisitions, disposals and currency movements, this represents an 8.2% decline.

Revenue from sales and trading was £300m (€449m) representing 50% of total revenue for the quarter.

Media revenue was £35m (€52m), down 5% (2% on an underlying basis) compared to the same period last year.

The company said this reflected the relative resilience of its agency business, which provides news to traditional media outlets.

Reuters recently announced its decision to strengthen its core business, including reuters.com, by limiting access to Reuters news via other financial news websites.

This is expected to cause a modest decline in media revenues in the second half of this year.

Commenting on the figures, Tom Glocer, Reuters Group Chief Executive, said today: "In the first quarter, we saw a noticeable improvement in trading conditions, particularly in the US, where new sales over the quarter outpaced cancellations for the first time since March 2001.

"We are continuing to build competitive momentum, with good sales wins in all three of our financial segments.

"Now that we have achieved a better than forecast sales performance in the first quarter, we expect that our second quarter underlying recurring revenue decline will improve to between 6% and 6.5%. We continue to foresee a more gradual rate of recovery in the second half," Glocer added.

He also said that this was the first time that Reuters has reported performance using its redefined customer segments.

Instinet Group, the electronic brokerage in which Reuters has a 63% stake, will report its first quarter results today week, after which Reuters will publish a consolidated Group revenue statement.