(AP) The announcement by Finance Director David Grigson came as Reuters reported that its first quarter revenue fell to $1.32 billion from $1.4 billion during the same period last year.
The company said it did not anticipate an improvement in market conditions soon, and predicted underlying subscription revenues would fall by between 2% and 3% over the first half of 2002 and between 5% and 6% in the second half.
“Our first quarter revenue reflects the performance of the Reuters customer segments in line with our expectations and significantly reduced revenues in Instinet,” said Reuters Group Chief Executive Tom Glocer, referring to the company’s electronic brokerage business. “Despite challenging market conditions, we remain focused on margin enhancement,” he added.
Reuters said that excluding Instinet, in which it owns an 83% stake, its revenues were up 5% to $1.1 billion.
Instinet’s revenues plunged 39% to $221 million compared with the first quarter of 2001, when market volumes were booming, Reuters said. Instinet is an electronic exchange that matches up buyers and sellers of stock without middlemen.
Its poor showing is bad news for Reuters, as it had been a strong performer.
Grigson told analysts in a conference call that Reuters’ cost-cutting efforts were on track. “One of the ways in which we are holding to our margin target is by managing down the cost side,” Glocer said.