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Last Updated: Wednesday, 20 April, 2005, 10:31 GMT 11:31 UK
New sales to lift Reuters revenue
Chief executive Tom Glocer
View from the top: Mr Glocer says sales are rising
Subscription revenue at global news and information provider Reuters fell 1.4% in the first three months of the year.

The group added that earnings from subscriptions to its news and trading tools were unlikely to rise in the current quarter.

Reuters said that this was to be expected as clients shifted from older products to its new range.

Subscription sales, however, rose for the first time since 2001 and are set to boost earnings later this year.

'Close to zero'

There is a lag of about three months between signing a contract and it showing up in the company's earnings, a spokeswoman said.

"We have made a good start to the year, with positive net sales in every month and new product launches," said chief executive Tom Glocer.

Reuters flagship product

Subscription revenues during the first three months of 2005 were 530m ($1.01bn), down 1.4% from the same period a year earlier.

Growth of "second quarter underlying recurring revenue is likely to be close to zero," Reuters said in a statement.

Fight back

Subscribers had been switching to competitor services but a company spokeswoman said that the rate of decline in subscription revenues has slowed since Reuters launched a turnaround programme in 2002.

In an effort to head off increased competition from rivals such as Bloomberg and hang onto market share, Reuters has been cutting staff and trimming its product portfolio.

The impact of this has been slowly feeding through into the company's earnings, the spokeswoman said.

Meanwhile, the group said it was still in talks over the possible sale of Instinet electronic brokerage subsidiary, in which it owns a majority stake of 62%.

Newspaper reports suggest the group is close to selling Instinet to the Nasdaq stock market in the US for $1.8bn.

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