Thomson Reuters (NYSE: TRI), the world’s leading source of news and information for professional markets, announced its second quarter results for 2016, which included an overall decline in revenue of 1 percent, a 4 percent increase in subscription revenue for its legal business and a 7 percent revenue increase for Reuters News. Results for the second quarter were consistent with first quarter financials and are in line with the company’s guidance.

Highlights for Q2 2016 include:

• Total revenue was $2.8 billion, down 1 percent year-over-year.
• Financial and Risk revenue was $1.52 billion, down 1 percent year-over-year.
• Legal revenue was $846 million, up 1 percent year-over-year.
• Tax and Accounting revenue was $324 million, up 1 percent year-over-year.
• Corporate & Other (including Reuters news) revenue was $79 million, up 7 percent year-over-year.
• Overall, legal revenue increased 3 percent, excluding U.S. print which declined 8 percent, bringing the total legal revenue increase to 1 percent.
• Subscription revenue in the Financial & Risk category remained flat. Desktop revenue dropped 3 percent, but Feeds, Risk and other non-desktop revenue grew 4 percent.
• Subscription revenue in the Legal category grew 4 percent.
• Reuters News revenue was $79 million, a 7 percent increase year-over-year.
• Costs for Corporate & Other increased from $86 million to $94 million, mostly due to the company’s Transformation program.
• Consolidated operating profit was $401 million compared to $345 million year-over-year.
• Adjusted earnings per share was $0.50.

In its second quarter report, Thomson Reuters attributes revenue declines to the impact of foreign currency.

“Our core business showed resilience and we continued to make progress throughout the second quarter despite a challenging backdrop and turbulent market conditions for many of our largest customers,” said Thomson Reuters president and CEO Jim Smith. “We are tracking to our full-year target and are well positioned to help our customers navigate the global trends affecting their industries.”

In its second quarter earnings report, Thomson Reuters reaffirmed its guidance for the remainder of the year, including revenue growth (not including Financial & Risk recovery revenue) of 2 percent to 3 percent, adjusted EBITDA margin between 27.3 percent and 28.3 percent, underlying profit margin between 18.4 percent and 19.4 percent, and free cash flow between $1.7 billion and $1.9 billion.

On July 11, Thomson Reuters announced that it was selling its IP and Science business to Onex and Baring Private Equity Asia for $3.55 billion in cash, which will yield net proceeds between $3.1 billion and $3.2 billion after taxes and expenses. The company will use $1 billion of the sale proceeds to buy back shares and use the balance to repay debt and reinvest in the business.

The IP and Science business portfolio includes Web of Science, Thomson CompuMark, Thomson Innovation, MarkMonitor, Thomson Reuters Cortellis and Thomson IP Manager. The completion of the sale is expected in the next few months, provided it overcomes any regulatory hurdles.

Insider Take:

While Thomson Reuters’ results for the second quarter of the year may have been lackluster, the company is holding its ground with only a slight revenue dip which is consistent with last year’s results for the same period, compared to companies like the New York Times with more volatile financials.

Also on the plus side, Thomson Reuters will enjoy an infusion of cash from the sale of its IP and Science business, and it is seeing an uptick in subscription revenue in the Legal category and revenue from Reuters. Other potential factors impacting financials for the remainder of the year will be Brexit and the ever-changing currency market.