UPDATE 2-LSEG reports in-line first quarter as Microsoft partnership progresses

(Adds share price, annual meeting, analyst comment)

By Huw Jones

LONDON, April 25 (Reuters) - The London Stock Exchange Group said on Thursday its first quarter growth was in line with plans for the roll out of products from its partnership with Microsoft, though the bourse's shares hit a five-month low in early trading.

LSEG said total income, excluding recoveries, in the first quarter was 2.089 billion pounds ($2.61 billion), with gross profit of 1.893 billion pounds, in line with analysts' consensus forecasts compiled by LSEG.

LSEG was "confident of continued growth and improving profitability", adding that it was on track to meet all financial guidance provided during its November 2023 Capital Markets Day.

However, LSEG's shares fell over 1% in early trading to lows last seen in November.

LSEG, which provides financial market data and analytics to banks and other financial institutions, said that organic annual subscription value (ASV) growth, a benchmark of recurring revenue closely watched by analysts, came in at 6% in the first quarter, short of some analysts' expectations.

"However, given the solid income number and reiteration of all previous guidance, we don't expect any material changes to consensus on the back of the release," analysts at RBC Capital Markets said.

Good underlying growth from strong retention, robust sales and pricing, was partly offset by the increasing impact of Credit Suisse losses, as expected, it said, a reference to the forced takeover of the Swiss bank by rival UBS.

Organic ASV growth is expected to remain around these levels throughout 2024, despite further Credit Suisse impact, LSEG said.

"We continue to make strong progress in our Microsoft partnership, with a number of products expected to be in external pilot or general release this half," LSEG CEO David Schwimmer said in a statement.

Shareholders at LSEG's annual meeting later on Thursday are being asked to give the green light to potentially doubling Schwimmer's total annual pay.

LSEG is looking ahead to developing its partnership with Microsoft as it completes the integration of data and analytics company Refinitiv it bought in 2021. The deal turned the 300-year-old bourse into a company where data and analytics account for about 70% of the business.

LSEG said that 500 million pounds in a directed buyback was completed in the first quarter, and that it was targeting one billion pounds in total buybacks in 2024.

Thomson Reuters, owner of Reuters News, holds a minority stake in LSEG, which pays Reuters for news.

($1 = 0.8018 pounds) (Reporting by Huw Jones, editing by Sinead Cruise and Tomasz Janowski)