(Adds details on results, analyst comments, shares)
* Suspends dividend on preferred shares
* Q4 adj profit C$0.14 vs est C$0.16
* Revenue down 9 pct
* Shares drop as much as 15 pct
By Bhaswati Mukhopadhyay
Feb 9 (Reuters) - Yellow Media Inc posted a fourth-quarter profit below analysts' expectations and suspended dividend on its preferred shares as the telephone directory publisher scrambles to save cash.
Shares of Yellow Media, which has been struggling to sell advertising space in its traditional Yellow Pages and business directories, fell 15 percent to a low of 16.5 Canadian cents in morning trade and were among the top percentage losers on the Toronto Stock Exchange on Thursday.
Investors have punished Yellow Media, which published its first directory in 1908, for its flailing attempts to move its directory business away from print and towards an online model.
Analysts say the company's online revenue has not grown fast enough to offset the decline on print. Online revenue accounted for about 29 percent of its total revenue this year, compared with 21 percent last year.
"It is not like print will go off tomorrow. We need to see what is the pace of deceleration," S&P credit analyst Madhav Hari said.
However, Standard & Poor's Ratings Services had put Yellow Media -- whose market valuation about C$148 million but is saddled with a debt of about C$1.5 billion as of last year -- on credit watch with negative implications.
In an attempt to lower debt and rein in costs, the company had cancelled its common share dividend about five months ago.
"Suspension of dividend is consistent with company's desire to preserve cash," S&P's Hari said.
The Montreal-based company has also begun evaluating alternatives to refinance debt maturities in 2012 and beyond, it said in a statement. Yellow Media had repaid about C$800 million last year.
On Thursday, the company posted an adjusted profit of 14 Canadian cents a share from continuing operations, below analysts' average expectation of 16 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Revenue fell 9 percent to C$313.3 million, mainly due to lower print sales and weakness in its U.S. operations.
"It's bad, but it didn't get worse," S&P's Hari said. "It is comforting that the erosion (in overall business) was not worse than a lot of people had thought."
The stock was trading around C$6 in early 2011, but has slid some 97 percent to change hands at around 18 Canadian cents as its local listings business was superseded by internet-based giants including Google and Groupon. ($1 = 0.9954 Canadian dollars) (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Supriya Kurane, Maju Samuel)