REUTERS shrugged off a 25 per cent decline in terminal sales as a 20 per cent improvement in revenue from transactions helped to offset the drop in numbers of dealing positions at banks.

The company also agreed to sell its half-share in Factiva, the news archive service, for $160 million (£85.5 million) to its partner Dow Jones, in a deal that valued the unit at 13 times underlying earnings.

Third-quarter revenues were up 3.3 per cent, or 4.6 per cent on a constant currency basis, despite the loss of 3,000 terminals, stemming from the loss of some subscriptions from the Telerate division acquired from Dow Jones.

David Grigson, finance director, said that the company was starting to exploit the shift towards computer-based trading, with the rapid growth in transaction revenues, which now account for 5 per cent of Reuters’ £631 million quarterly turnover.

Reuters is preparing for a big shift in City employment, in which it expects banks to shed many dealer jobs in favour of using computers to conduct trading. The company is trying to shift its business model from per-subscription charging to generating more income on a per-transaction basis.

However, the company’s shares dipped 6.75p to 430.5p, as the City was hoping for an upgrade to previous revenue growth targets.

Reuters said that full-year growth would be towards the top of a previously stated 5 to 6 per cent range, but the City had hoped that the company would beat 6 per cent on a constant currency basis.

All big territories, apart from Western Europe, achieved underlying revenue growth, but the region that includes Germany, France and Italy was flat, with Tom Glocer, the chief executive, blaming “anaemic economic growth” and “some banking consolidation” in Italy and Germany that reduced the number of Reuters terminals.

Meanwhile, the sale of the half-share of Factiva represented a healthy return on the $40 million that Reuters invested in the business in 1999, and the chief executive said that it was time to “take a look at what was going on in the wider market, where Google is launching a news archive”.

Dow Jones, publisher of The Wall Street Journal, is buying the unit to help to “reduce our reliance on print publishing”, according to Rich Zannino, the chief executive. The US company, which reported an 8.3 per cent decline in underlying earnings in its own third quarter, is also in the process of selling six of its local newspapers.

Reuters also announced the appointment of the high- profile Indian entrepreneur Nandan Nilekani, co-founder of Infosys, to join its board.

THE FIGURES

Third-quarter breakdown

• Sales and trading

  £418m (+4%*)

• Research and asset management

  £74m (+14%)

• Corporate (enterprise)

  £98m (+8%)

• Media

  £41m (+3%)

• Total

  £631m (+5%)

  * All growth figures on a constant currency basis

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts