Two American businesses with strong family links have reported disappointing results – and both are predicting the first few months of 2012 will be difficult for their companies.
Thomson Reuters, controlled by members of the Thomson family, reported a fourth-quarter loss, because of a $3 billion (€2.27 billion) non-cash goodwill impairment charge related to its financial services business.
Although revenues grew by 5% for the full year, the one-time charge left the business with a net loss of $2.6 billion. Excluding the charge and other costs, the company had a profit of $0.54 a share.
“This non-cash charge was the result of the company's annual goodwill impairment testing required under IFRS and related to the company's financial services business,” the New York-based company said in a statement.
It added that the charge, which the media group excluded from adjusted earnings and EBITDA and underlying operating profit, will not affect the company's normal business operations, cash flow or liquidity.
Fellow New York-based business Bunge said its net income dropped from $2.35 billion for the year ended 31 December 2010 to $942 million for 2011, while earnings fell 60%.
During the fourth quarter, its agribusiness segment was hit particularly hard - operating profit dropped by 46% to $203 million.
Overall, its net income fell to $254 million during the quarter from $301 million in the same period the year before.
The next couple of months will also be tough for the company, said Alberto Weisser, Bunge's chairman and chief executive officer.
However, he added: “Despite this, we expect to generate good results for the full year. We see positive signs in the industry and have confidence in our business.”
Arch rival and family business Cargill has also been struggling. It reported its third consecutive drop in quarterly earnings on 10 January.