Shares in Reuters, the world's biggest financial information provider, touched a three-and-a-half-year low after the company reported weaker-than-expected revenues and warned of tough times ahead.
Total revenues fell 6 per cent to £912m for the first quarter, reflecting a heavy fall in revenue from its electronic broking unit, Instinet Group, which is cutting prices to meet stiff competition.
Reuters also worried investors with a forecast that core recurring revenues, which come from supplying news and data to financial institutions worldwide, would fall 5 to 6 per cent on an underlying basis in the second half of this year.
They fell 1 per cent in the quarter, and the company has predicted them to drop 2 to 3 per cent in the first half. Underlying revenues strip out the impact of Reuters' recent acquisition of ex-rival Bridge Information Systems. Including Bridge, recurring revenues were expected to grow this year.
Reuters also said it expected to shed about 2,100 jobs on a gross basis, putting the company above its target to achieve a net 1,800 job losses from its workforce of about 19,000. It aims to cut £235m from its cost base by 2003.
But the market did not like the company's outlook.
"It (the stock) looks pretty unloved at the moment," said Chris Kenny, a fund manager at Smith & Williamson.
He said Reuters' chief executive Tom Glocer faced a "nasty combination" of a sharp downturn in the financial services industry, falling revenues and profits at Instinet and a major restructuring aimed at streamlining the business.
The shares closed down 4p at 506p, having touched a low of 478.5p during trading.
Some analysts said the outlook did not dramatically alter the picture. The shares have halved over the past year, underperforming their European media peers by about 30 per cent.
"Reuters sees no near-term turnaround in the depressed conditions affecting its financial services customers," the company said in the first-quarter update.Reuse content