Torstar faces sluggish newspaper ad market, sets bleak outlook
By Alastair Sharp
TORONTO (Reuters) - Torstar Corp (TSb.TO: Quote), owner of Canada's largest daily newspaper by circulation, warned that print revenue would remain under pressure in the second half of the year, after reporting its fifth straight decline in quarterly profit.
The dismal earnings report and outlook sent shares of the Toronto Star owner down nearly 6 percent in morning trading on Wednesday.
The company said earnings in its book publishing business, which includes the Harlequin series of romantic novels, had suffered because of less demand in overseas markets and would slip in the second half.
It earned C$212.8 million from the business in the second half of 2012, according to regulatory filings.
RBC Dominion Securities analyst Haran Posner blamed Harlequin for most of the overall disappointment, given that investors were already expecting weakness in the media segment.
Torstar has been slashing costs by cutting jobs and outsourcing, and it signaled it would continue on that path.
"In the media operations, print advertising revenues are likely to continue to be under pressure," Chief Executive Officer David Holland said in a statement.
Revenue in the media business fell 8 percent to C$255.4 million in the second quarter, largely due to declines in print advertising at the company's newspapers, which also include the free Metro commuter titles. Continued...