Torstar profit beats, uncertainties remain for media

Wed Feb 29, 2012 12:04pm EST
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(Reuters) - Canadian publisher Torstar Corp posted a fourth-quarter profit that beat expectations, as cost cuts offset weak print advertising revenue, but said revenue outlook for the media unit remains uncertain for the year.

The publisher of the Toronto Star, Canada's biggest daily, said print advertising continues to be challenged by economic uncertainty and shifts in spending by advertisers.

Torstar -- which also owns daily and community newspapers, the Workopolis website and publishes romance novels under the Harlequin banner -- is investing in digital initiatives amid a bleak print advertising market.

The company, which has seen Harlequin grow by 6 percent in 2011, said it is likely to be tough to achieve a similar level of earnings this year at Harlequin, given the economic crisis in Europe and an increase in the royalty rates on digital sales.

However, digital revenue growth is expected to continue this year, the company said in a statement.

For the October-December quarter, net income attributable to shareholders rose to C$64.3 million, or 81 Canadian cents a share, from C$36.3 million, or 45 Canadian cents a share, a year ago.

On an adjusted basis, Torstar earned 70 Canadian cents a share, topping analysts' average expectation of 55 Canadian cents a share.

Revenue rose 2 percent to C$425.3 million, below analysts' average expectation of C$440.3 million, according to Thomson Reuters I/B/E/S.

The company has sought to trim its editorial workforce by offering voluntary buyouts, while journalists at the Star have said the company also plans to outsource layout and editing jobs.

Shares of the company closed at C$9.35 on Tuesday on the Toronto Stock Exchange.

(Reporting by Alastair Sharp in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Supriya Kurane, Saumyadeb Chakrabarty)

A pedestrian walks past a Toronto Star newspaper box in front of the Toronto Star building at One Yonge Street in Toronto January 18, 2008.    REUTERS/Mark Blinch