US subscriptions remain strong, while Europe is improving

In the three months to September core subscriptions had been expected to drop 5% - instead they fell 4.4% to �528m.

The firm makes more than 90% of its total revenue from subscriptions, which it now expects to fall by 5.5% for the year instead of 6%.

Shares in the firm closed up 27.5 pence at 350.5p, a rise of 8.5%.

Sales also outpaced cancellations for the first time since 2001.

Signs of improvement

Investors welcomed the better-than-expected results, pushing shares in the group to the top of the FTSE 100 winners list in early trade.

We don't have control over what the markets do - if they turn down we may not achieve our targets Tom Glocer, Reuters Check Reuters' share price

Total revenue at the group - which strips out the effects of currency movements, acquisitions and sales - stood at �570m for the quarter, a drop of 5% on a year ago.

Chief executive Tom Glocer said that sales - which are a leading indicator of future revenues - had remained in positive territory throughout the year in the US market.

Sales in continental Europe remains negative, but there are signs of improvement, he added.

As a result, the decline in core revenues is expected to narrow further in the three months to December, with Reuters predicting a dip of about 3% - compared to analyst forecasts of a 4% fall.

Quiet on 2005

However, Mr Glocer refused to comment on the outlook for 2005.

"We have not and we won't be today giving guidance for 2005," Mr Glocer said.

He declined to comment on an earlier leaked memo, which said that although management envisaged a "tough" 2005, it had set a budget that shows the company "growing its revenues for the first time in four years".

The memo cautioned that this was "not meant to imply that revenues will be positive for 2005 as a whole."

Mr Glocer said: "The big note of caution I'd sound is we are confident in what we're doing internally to head towards growth, but we don't have control over what the markets do - if they turn down we may not achieve our targets."

Mr Glocer also remained tight-lipped about ongoing speculation over a possible takeover of rival financial data firm Telerate, saying there were "no material" merger and acquisition developments that warranted discussion.

Reports have claimed that Reuters could take over Telerate - boosting its market share by adding 35,000 positions in the US, Europe and Asia - in a deal worth $200-300m.