Torstar Corp. profits were steady in the third quarter despite the negative effect of a stronger Canadian dollar and charges related to its restructuring, but the head of the newspaper and book publisher said he’s less optimistic about operating profits for the rest of the year.
“Right now we’d be anticipating that our fourth-quarter could be a weak quarter,” president and CEO David Holland told analysts on a quarterly earnings call this morning.
“Having said that, this isn’t unlike predicting ad revenue. We can never be absolutely certain what we’re going to see… as the quarter continues.”
Net income for the owner of the Toronto Star and other newspapers, Harlequin books and numerous websites was $4.1 million for the three months ended Sept. 30, a small increase from $4 million a year ago.
Profits in both periods were equivalent to five cents per share, falling short of analyst expectations that Torstar would earn 23 cents per share.
However, Torstar managed to beat expectations when losses booked from its holdings in CTVglobemedia were removed from the results. The company said earnings were worth 28 cents per share when a loss of $17.9 million related to CTVglobemedia was excluded.
Torstar has agreed to sell off its 20% stake in CTVglobemedia to BCE Inc. for $345 million.
Revenue increased by $9 million to $352.7 million, affected partly by a $6.4-million impact from the stronger loonie. Analysts had expected, on average, revenues of $349 million.
In its newspaper and digital division, revenue increase 6.3% to $235.2 million, driven by stronger advertising buys, particularly on a national scale.
Holland said the company is encouraged by the momentum generated by print advertising revenue at the Toronto Star, but is still cautious about the slow economic recovery.
Torstar has about 6,600 employees across its operations, which includes the Star Media Group led by the Star, and digital properties including TheStar.com, Toronto.com, Workopolis, Olive Media, and EyeReturn Marketing.
The company also owns Metroland Media Group, publishers of community and daily newspapers in Ontario, as well as Harlequin, the world’s largest publisher of romance fiction.
Holland said the company plans to ramp up investment in its digital initiatives during the fourth quarter.
“We’re doing an array of different things across our group,” he said.
“We are making some investments in some areas where we think there is new revenue streams that are available to us. They are really spread through Star Media Group and Metroland Media Group.”
