The Tax and Accounting business of Thomson Reuters turned in what its CEO called "a terrific quarter" for the three months ended March 31. The unit had a 58-percent increase in operating profit on a 30 percent-rise in revenue with a 9-percent increase in organic revenue. That came as the company had a 2-percent rise in profit on a 4-percent increase in revenue as Europe continued to be a drag on results.
Operating profit for Tax and Accounting for the most recently ended quarter was $310 million, up from $238 million. The division's quarterly revenue was $310 million, compared to $238 million a year earlier. The company's profit was $545 million, up from $536 million while revenue was $3.18 billion, up from $3.1 billion.
CEO James Smith, who took over at the end of 2011, said "I would say so far, so good" in an earnings webcast yesterday. He said operations in Europe would not completely turn around until the end of the year.
Tax & Accounting continued to benefit from acquisitions, particularly in the area of corporate tax. CFO Stephane Bello said the company was very pleased with the performance of the OneSource corporate tax platform. He also said there were strong sales of software and that revenue reflected a healthy economy for tax and accounting firms in the United States. The company had its seventh consecutive quarter of double-digit increases in EBITDA.
Bello said the company would utilize its cash to make acquisitions in areas that have performed well. He did not cite any specific unit, but said that Thomson would focus on small, fold-in purchases. The company reiterated 2012 guidance, which calls for single-digit revenue growth and EBITDA margin of 27 to 28 percent. Smith noted that the company will have the $1.25 billion in proceeds from its pending sale of its healthcare operations to help pay for deals.
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
