Torstar writes down goodwill, shares of publisher fall
TORONTO (Reuters) - Torstar Corp (TSb.TO: Quote), owner of Canada's largest daily newspaper by circulation, reported on Wednesday a quarterly loss on the back on a charge in its media division and its shares fell over 2 percent.
Torstar - publisher of the Toronto Star, a string of regional newspaper titles and Harlequin romance novels - took an asset impairment charge of C$85.5 million ($82 million) related to its media arm, mostly to write down goodwill at its Toronto Star business.
It said Harlequin earnings slipped but further decline should be limited in the current quarter. Print advertising revenue is likely to remain pressured, the company said, while its community media earnings grew and its pension funding outlook improved.
The company had warned over the summer that print revenue would remain under pressure in the second half of the year. The entire print newspaper business is struggling to offset falling advertising sales as readers increasingly get their news via the Internet or on mobile devices.
Torstar began charging readers for online access to the Star recently. The paywall was expected to help over the long term, but executives said earlier this year that the effect would be negligible for 2013.
The company's third-quarter net loss was C$70.8 million, or 89 Canadian cents per share, compared with net income of C$11.1 million, or 14 Canadian cents per share, a year earlier.
Excluding special items including the writedown, the company earned 21 Canadian cents per share, in line with the average estimate among analysts, according to Thomson Reuters I/B/E/S.
Operating revenue was down more than 7 percent at C$310.4 million, falling short of expectations.
"We remain focused on resizing the cost base but are also very disciplined and committed to continue to invest in those areas of highest value to our customers as we adapt to the changing media environment," Torstar Chief Executive David Holland said in the earnings statement. Continued...