(Reuters) - Canadian media and telecommunications conglomerate Quebecor Inc’s first-quarter profit halved due to higher costs, a sharp drop in media revenue and lower gains on financial instruments.
On an adjusted basis, the company earned 53 Canadian cents per share, far below the 62 Canadian cents analysts had expected.
Net income attributable to shareholders fell to C$35.6 million, or 49 Canadian cents per share, from C$71.4 million, or C$1.12 per share, a year earlier.
Gains on valuation of financial instruments fell to C$7.7 million during the quarter compared with C$81.9 million a year earlier. The C$74.2 million fall was the single biggest drag on earnings during the quarter.
Quebecor, which operates Canada’s largest newspaper chain that includes Calgary Sun, Toronto Sun and others, said revenue fell 1 percent to C$1.05 billion, reflecting a decline in all its businesses except the telecommunications unit.
Revenue from the telecommunications business, which accounts for over half of Quebecor’s total, rose 4 percent to C$668.8 million, boosted by higher wireless subscriptions.
News media revenue fell 11 percent to C$207.6 million.
“Unfortunately, in the news media segment, the latest cost-containment initiatives did not make up for the decrease in revenues during the quarter, which was more significant than in previous periods,” said Pierre Karl Peladeau, chairman of Quebecor Media Inc, a subsidiary of Quebecor.
Like other publishers, Quebecor has been affected by advertisers’ waning interest in print as more readers shift online. It cut 500 jobs at its Sun Media unit in November.
Quebecor also owns the Ottawa Sun, le Journal de Montreal and TVA Group, the company’s French language TV network.
Reporting by Krithika Krishnamurthy in Bangalore; Editing by Sreejiraj Eluvangal