Reuters, the news and financial information giant, has notched up its fifth consecutive quarter of revenue growth.
The company again beat City expectations in its quarterly trading update. However revenues remain in negative territory and Reuters warned that the rate of improvement would slow later this year.
Tom Glocer, the chief executive, said: "I don't think it's exactly time to break open the champagne."
Reuters said recurring revenues in the first quarter fell 8.4 per cent - better than its previous guidance of 9 per cent.
Mr Glocer said: "In the first quarter, we saw a noticeable improvement in trading conditions, particularly in the US, where new sales over the quarter outpaced cancellations for the first time since March 2001. We are continuing to build competitive momentum, with good sales wins in all three of our financial segments."
Reuters also predicted that the second quarter of 2004 would see revenue decline, year-on-year, of between 6 and 6.5 per cent.
Beyond that, the company cautioned that it would see a "more gradual rate of improvement" in the second half.
Simon Baker, an analyst at SG Securities, said: "The cyclical recovery continues to build, primarily through the US engine."
David Grigson, Reuters' finance director, said there were "structural issues still pending" that the company had to grapple with. He cited the upcoming large-scale job losses in the US expected from two banking mega-mergers that are yet to complete: JP Morgan Chase and Bank One, and the combination of Bank of America and FleetBoston Financial. Banks and brokerages are Reuters' most important clients. The severe downturn in financial services in recent years saw the cancellation of subscriptions to Reuters products.
Reuters has been reporting falling revenues for more than two years.
Analysts upgraded forecasts for this year and next but Reuters shares closed down 6 per cent at 390.5p as traders took profits. The stock has been rallying for more than a year.