plunged to their lowest level in more than a decade Wednesday after the financial news and data provider warned it wouldn't meet revenue targets for the second half and said operating margins could be weaker than expected in 2003.
Reuters slid 20% to $15.82 in early trading after saying it now expects sales to fall 6% to 7% in the second half of the year, not 5% to 6%, as had been previously projected. It also said sales will fall between 7% and 9% in the first half of next year.
"Looking ahead, we see market conditions worsening as financial services firms retrench still further," said CEO Tom Glocer in a statement.
Reuters maintained that operating margins would meet a target of 12% for 2002, saying cost cuts would make up for a decline in sales. But Glocer refused to offer any projections for next year. The company had previously hoped to achieve an operating margin of 13% in 2003.
"With outright revenue particularly volatile and in the absence of clear visibility beyond the first half, we are unable to predict an improvement in margin in 2003," Glocer said.
In the third quarter ending Sept. 30, overall revenue, which includes Reuters electronic trading service
, slid 7% to 855 million pounds. Sales at Instinet, which reported a third-quarter loss of $528 million on Tuesday, plunged 25% to 141 million pounds. Core revenue fell by 3%, excluding Instinet and was down 8% after stripping out recently acquired divisions from the defunct news and data provider Bridge.
"In this environment, we will continue our strong focus on managing down our cost base," Glocer said, noting that further job reductions are likely.