February 26, 2009 / 4:18 PM / 9 years ago

UPDATE 2-Torstar swings to net loss, CEO to step down

* Q4 EPS C$0.23, excluding items

* Revenue up 2 percent

* Halves annual dividend

* CEO to step down, CFO to take over in interim

* Stock drops 9.4 percent (Adds details, stock price)

TORONTO, Feb 26 (Reuters) - Torstar Corp (TSb.TO) shares sank almost 10 percent on Thursday as the book and newspaper publisher posted a quarterly loss and said Chief Executive Robert Prichard was stepping down as the company fights to contain costs in a weakening economy.

The company, which also slashed its dividend and warned of further job cuts, said Chief Financial Officer David Holland would become interim CEO.

Torstar reported a net loss of C$211.2 million ($170.3 million) in the fourth quarter, or C$2.68 a share, compared with a net income of C$47.2 million, or 60 Canadian cents a share, a year earlier.

Excluding items, it earned 23 Canadian cents a share.

Torstar shares fell 60 Canadian cents, or 9.4 percent, to C$5.79 on the Toronto Stock Exchange in wake of the results.

Revenue rose to C$412.8 million from C$402.9 million a year earlier.

Analysts had expected the company to earn 51 Canadian cents, before special items, on revenue of C$384 million, according to Reuters Estimates.

Torstar publishes the Toronto Star, Canada’s biggest daily newspaper, as well as several other daily and weekly papers in Ontario, and the Harlequin line of romance novels.

The company, which has been cutting job across its stable of newspapers as the advertising market weakens, said it had taken steps to reduce its workforce by about 500 positions and said the layoffs would continue in early 2009. It has also frozen executive salaries across the board.

As part of its belt-tightening it cut its annual dividend to 37 Canadians cents a share from 74 Canadian cents a share.

“With continued pressure on newspaper revenue through the first two months of 2009, we are aggressively addressing costs across our businesses,” Prichard said in a statement.

The Toronto Star’s print advertising revenues fell 11.9 percent in the fourth quarter, the company said, as ads in the national automotive and other categories dropped.

Torstar said it expects advertising revenue to continue to decline as consumers and businesses react to the sharply slowing Ontario economy.

$1=$1.24 Canadian Reporting by Bhaswati Mukhopadhyay in Bangalore and Wojtek Dabrowski in Toronto; editing by Rob Wilson

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