The news keeps getting worse for
, once the leader of the financial publishing world.
On Tuesday the British-based company warned that its sales in the first half of this year would slide by about 9% because of weakened demand for its financial news and information system.
The financial publishing giant also posted a loss of $630 million for 2002, making Reuters as much a victim of the long bear market as any Wall Street brokerage firm. The company had a slim profit in 2001.
The bad news from Reuters pushed its stock down $1.74, or 11%, to $13.06.
The company, which reported an 8% year-over-year decline in revenue to $5.7 billon, has seen a steady decline in demand for its business news and market data information. In an attempt to stem the bleeding, it announced a new round of job cuts. Reuters intends to cut 3,000 jobs, of 18% of its workforce, over the next three years. That's on top of the 3,000 jobs the publisher already has cut the past two years.
Reuters' full-year loss mirrors the poor performance last year of Instinet, the electronic trade processing network that Reuters partially spun off in 2001 and still owns a 60% stake in. A week ago, Instinet reported that it lost $735 million, or $2.71 a share, for all of 2002. In the fourth quarter alone, Instinet lost $112 million, or 34 cents a share, in the fourth quarter.
Indeed, Reuters blamed a large portion of its 2002 loss on a writedown in the value of its Instinet stake and a $333 million restructuring charge. The company said, however, that it intends to hold onto its shares in the struggling ECN, which has lost business to several upstart rivals.
While the financial publishing business is floundering, Reuters continues to make acquisitions in the financial data industry. The company announced a deal to acquire
, a competitor to Thomson Financial First Call, for $224 million. Like First Call, Multex compiles earnings information on thousands of public companies.
Multex shares soared on the news to $7.20, a gain of $2.70, or 58%. Reuters, which already owns 6% of the company's stock, intends to pay about $7.35 a share.
Prior to the deal, Multex had a market capitalization of $149 million. Last year its revenue decreased 1% to $92.4 million. But its loss also narrowed 83% to $7.4 million.