Reuters, the financial information and news giant, said its rate of revenue decline should ease in the second half of this year, as it reported a 12 per cent fall in underlying revenues for the first six months of 2003.
The news group failed to convince the market its prospects have significantly improved, however, after admitting that next year would see another fall in sales.
The shares ended a rally that has seen them double since mid-March, closing down 8 per cent to 200.75p even though the group's interim results came in above market expectations.
The company warned the cycle of job losses among its customers in Europe had not bottomed out, although it appeared to have turned the corner in the US.
The group said its operating margin came in at 14.7 per cent, ahead of previous guidance, while pre-tax profit was £16m, from a loss of £88m last year. The company raised the cost-savings target for this year by £10m to £55m.
Simon Baker, analyst at SG Securities, said Reuters had delivered "great profit number" but the positive news from the company had largely been anticipated.
David Grigson, group finance director, said Reuters was "on target" but it would take a "remarkable turnaround in events" for the company to see revenue growth in 2004 compared with 2003.
"This is not a cycle with a V-shaped recovery. We are not going to see things fire up again in 2004. The next couple of years are going to be reasonably tough," Mr Grigson said.
Johnathan Barrett, analyst at Teather & Greenwood, forecast that revenues would contract some 7 per cent next year.
He said: "People had got far too excited [about Reuters shares]. There's a very large restructuring programme here. The size of the task should not be underestimated."