Torstar profit plunges as advertisers abandon, outlook weak
TORONTO (Reuters) - Torstar Corp (TSb.TO: Quote), publisher of the Toronto Star, Canada's largest daily newspaper, cut 67 jobs and said it would rein in costs in 2013 as the revenue outlook from its main media business remained uncertain.
Its profit and revenue slips in the fourth quarter were worse than anticipated by analysts, and the company warned of continued tough times ahead. Its shares fell almost 9 percent in early trading.
Torstar, like many publishers in North America, has struggled with declining print advertising. It has been investing to create digital content as more readers move online, while also aggressively cutting jobs.
"Costs continue to be an area of emphasis as we resize the cost base in response to the pressures on ad revenue," David Holland, Torstar's chief executive, said on a call with analysts.
He said the company expects to save C$6.6 million a year in labor costs once the job cuts are fully implemented, while early indications point to more print advertising weakness in 2013.
Higher royalties paid to authors for digital sales, and promotional and incentive spending also hurt profit.
RBC analyst Haran Posner said Torstar had suffered another challenging quarter, with the company's community newspapers providing the only positive surprise.
The company, which publishes more than 100 newspapers in Canada, said it could delay its dividend increases as an increased portion of its free cash gets funneled to pension payments.
PROFIT FALLS Continued...