Why Thomson-Reuters (TRI) Stock Is Higher This Morning

NEW YORK (TheStreet) -- Shares of Thomson-Reuters Corp. (TRI) are up 2.12% to $35.57 this morning after the information provider reported first quarter 2014 results. 

Revenues from ongoing businesses increased 1% before currency to $3.1 billion.

 Adjusted EBITDA increased 8% to $820 million with a margin of 26.2%, up from 24.4% in the prior- year period. 

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Underlying operating profit increased 14% to $528 million with a margin of 16.9%, up from 14.9% in the prior-year period. 

Adjusted earnings per share were 46 cents versus 38 cents in the prior-year period, up 21%. 

The company affirmed its 2014 outlook.

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. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

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

  • The current debt-to-equity ratio, 0.50, 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 0.64, displays a potential problem in covering short-term cash needs.
  • TRI, with its decline in revenue, slightly underperformed the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, TRI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for THOMSON-REUTERS CORP is currently lower than what is desirable, coming in at 25.99%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.70% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $407.00 million or 57.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.You can view the full analysis from the report here: TRI Ratings Report
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