November 2, 2011 / 11:05 AM / 7 years ago

UPDATE 2-Torstar profit tops estimates as digital business grows

* Revenue rises 7 pct

* Says visibility on advertising revenue limited

* Expects newsprint pricing to remain flat (Adds details)

Nov 2 (Reuters) - Torstar Corp (TSb.TO) reported a higher-than-expected third-quarter profit, helped by growth at its digital division, but said weak advertising spending was likely to continue.

The publisher of the Toronto Star, Canada’s biggest daily newspaper, said advertising trends weakened during the quarter and continued into October as well.

Torstar — which also owns daily and community newspapers, the Workopolis website and publishes romance novels under the Harlequin banner — said newsprint pricing was expected to remain flat.

Torstar, which expects cost savings from restructuring of $$5.5 million in the fourth quarter, has been focusing on Harlequin’s transition from print to digital.

Publishers are increasingly spending to move online as they look to spark interest in consumers and advertisers and revive a business beset by declining circulation and advertising revenue.

For the July-September quarter, net income attributable to shareholders rose to C$25.2 million ($24.7 million), or 32 Canadian cents a share, from C$14.5 million, or 18 Canadian cents a share, a year ago.

On an adjusted basis, Torstar earned 38 Canadian cents a share.

Revenue rose 7 percent to C$378.7 million. Digital media revenue was up 27 percent in the quarter.

Analysts on average were expecting earnings of 36 Canadian cents a share, on revenue of C$363.1 million, according to Thomson Reuters I/B/E/S.

Torstar shares, which have lost more than a fourth of their value in the last six months, closed at C$10.18 on Tuesday on the Toronto Stock Exchange. ($1 = 1.020 Canadian Dollars) (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Saumyadeb Chakrabarty)

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