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TheStreet Open House

Why Thomson Reuters (TRI) Is Down Today

Stock quotes in this article: TRI

NEW YORK (TheStreet) -- Thomson Reuters (TRI) was falling 5.9% to $34.44 Wednesday following an earnings report that missed analyst estimates for earnings.

The company reported earnings of 49 cents a share for the fourth quarter. Capital IQ Consensus Estimate called for earnings of 52 cents a share. Revenue rose 0.6% year-over-year to $3.27 billion, in-line with analyst estimates of $3.29 billion.

For its 2014 guidance, Thomson Reuters expects revenue of $12.7 billion. Analysts estimate revenue of $12.84 billion for the year.

Must read: 5 Technology Stocks Dragging The Sector Down

TheStreet Ratings team rates THOMSON-REUTERS CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate THOMSON-REUTERS CORP (TRI) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has increased to $676.00 million or 11.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.38%.
  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TRI's debt-to-equity ratio is low, the quick ratio, which is currently 0.68, displays a potential problem in covering short-term cash needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 38.5% when compared to the same quarter one year ago, falling from $441.00 million to $271.00 million.
  • The gross profit margin for THOMSON-REUTERS CORP is currently lower than what is desirable, coming in at 25.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.78% trails that of the industry average.
  • You can view the full analysis from the report here: TRI Ratings Report

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