• Revenues from ongoing businesses grew 1% before currency to $3.1 billion
• Adjusted EBITDA and underlying operating profit were both down 3%
  • Adjusted EBITDA margin 26.5%, down 100 basis points; excluding charges was 27.0%
  • Underlying operating profit margin 17.1%, down 70 basis points; excluding charges was 17.6%
• Adjusted earnings per share were $0.45 versus $0.48 in the prior-year period
• 28.4 million shares repurchased since October 2013 returning $1.0 billion to shareholders
• 2014 Outlook affirmed

"I am pleased to report yet another quarter of results in line with expectations, building on our first-half momentum," said James C. Smith, chief executive officer of Thomson Reuters. "It is particularly encouraging to see sales trends continue to improve in both our financial and legal businesses alongside consistent strong performance from our other units. We are delivering on our overarching objective: building a platform for higher, more sustainable and more profitable future growth."

Consolidated Financial Highlights – Third Quarter

The increase in operating profit was primarily due to favorable fair value adjustments largely associated with foreign currency embedded derivatives in certain customer contracts. The decline in diluted EPS resulted from higher costs associated with foreign currency fluctuations and income tax expense, which more than offset the increase in operating profit. 

• Revenues from ongoing businesses were $3.1 billion, a 1% increase before currency, reflecting 4% combined growth from the company's Legal, Tax & Accounting and Intellectual Property & Science businesses, which was offset by a 2% decline in Financial & Risk.
• Adjusted EBITDA decreased 3%, and the corresponding margin was 26.5% versus 27.5% in the prior-year period, primarily due to higher operating costs and charges.
  • Excluding charges from both periods, the margin was 27.0%, down 80 basis points from the prior-year period.
  • Excluding charges from both periods and the negative impact of foreign currency the margin was 27.3%, down 10 basis points from the prior-year period.
• Underlying operating profit decreased 3%, and the corresponding margin was 17.1% versus 17.8% in the prior-year period. The decrease was primarily due to the same factors that impacted adjusted EBITDA.
  • Excluding charges from both periods, the margin was 17.6%, down 60 basis points from the prior-year period.
  • Excluding charges for both periods and the negative impact of foreign currency, the margin was 18.0%, up 20 basis points from the prior-year period.
• Adjusted EPS was $0.45 compared to $0.48 in the prior-year period, down 6%. 

Third-Quarter Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency as Thomson Reuters believes this provides the best basis to measure the performance of its business.

Financial & Risk

• Revenues were down 2% (down 3% organic) due to the impact of negative net sales over the prior 12 months and a 5% organic decline in transactions-related revenues.
• Recurring subscription-related revenues decreased 3% due to the impact of negative aggregate net sales over the prior 12 months.
• Transactions-related revenues increased 3% (down 5% organic) due to lower trading volumes in fixed income markets. Recoveries revenues increased 1%.
• By geography, revenues in Europe, Middle East and Africa (EMEA) were down 4%, and revenues in the Americas and Asia were flat.
• Net sales were positive for the quarter and were positive for all regions – the Americas, Europe and Asia.
• EBITDA decreased 6% due to $18 million in charges and the impact of foreign currency. The margin was 25.1% versus 26.4% in the prior-year period.
  • Excluding charges from both periods, the margin was 26.2%, down 50 basis points from the prior-year period.
  • Excluding charges from both periods and the negative impact of foreign currency, the margin was 27.1%, up 100 basis points from the prior-year period.
• Operating profit decreased 8% due to the same items that impacted EBITDA. The margin was 15.5% compared to 16.8% in the prior-year period.
  • Excluding charges from both periods, the margin was 16.6%, down 50 basis points from the prior-year period.
  • Excluding charges from both periods and the negative impact of foreign currency the margin was 17.5%, up 100 basis points from the prior-year period.

Legal

• Revenues increased 1%. Excluding US print, revenues grew 3% (all organic).
• Solutions businesses (47% of Legal revenues) grew 7% (6% organic), driven by strong growth from Elite, Practical Law and Pangea3. Solutions businesses represent all of Legal's revenue excluding US print and US online legal information.
• US online legal information (38% of Legal revenues) declined 1%.
• US print (15% of Legal revenues) declined 8%.
• EBITDA increased 1%. The margin was 37.9% compared to 38.0% in the prior-year period.
• Operating profit increased 2% with a margin of 29.7% versus 29.4% in the prior-year period.

Tax & Accounting

• Revenues increased 13% (9% organic) with good growth across each segment led by the Corporate business.
• EBITDA increased 9% and the margin was 23.9% compared to 24.4% in the prior-year period. The EBITDA margin decline was primarily related to reinvestment in the business.
• Operating profit increased 26% and the margin was 14.3% compared to 12.6% in the prior-year period due to lower depreciation and amortization expense.
• Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Tax & Accounting business. Full-year margins are more reflective of the segment's underlying performance.

Intellectual Property & Science

• Revenues increased 3% driven by recurring revenue growth of 5% (79% of revenues) partially offset by a 4% decline in transactions-related revenues (21% of revenues).
• EBITDA decreased 5% with a corresponding margin of 30.6% compared to 33.3% in the prior-year period. The EBITDA margin decline was primarily due to the dilutive impact of prior-year acquisitions and reinvestments in the business.
• Operating profit decreased 11% with a corresponding margin of 21.8% compared to 25.4% in the prior-year period. The operating profit margin decline was a result of the same items that impacted the EBITDA margin.
• Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Intellectual Property & Science business. Full-year margins are more reflective of the segment's underlying performance.

Corporate & Other (Including Reuters News)

Reuters News revenues for the third quarter of 2014 were $79 million, down 3% from the prior-year period. Corporate & Other costs for the third quarter of 2014 were $73 million, compared to $70 million in the prior-year period.

Full figures available here.