Torstar Corp. delivered profits that exceeded analyst expectations in the fourth quarter, but the media company told investors Wednesday that revenues look uncertain this year as the sluggish economy keeps advertisers cautious.
“Visibility on ad revenue remains limited within the Canadian media operations,” president and CEO David Holland told investors on a conference call.
“The year started off slowly in January, but we have certainly experienced improvements in February.”
The company, which publishes a variety of newspapers including the Toronto Star and owns the Harlequin romance novel brand, said that profits rose 77% in the fourth quarter to $64.3 million.
The results were equal to 81 cents a share in the three months ended Dec. 31, rising from $36.3 million or 46 cents a share a year earlier.
On an adjusted basis, earnings were 70 cents per share, coming in well above analyst expectations of 55 cents per share, according to a poll by Thomson Reuters.
Torstar said it booked a remeasurement gain on 2011 acquisitions of $19 million.
Quarterly revenues rose to $425.3 million from $417.5 million.
Holland said that the company views the results as a solid performance overall, considering that it took a $6.4-million hit when factoring in the exchange rate for the stronger Canadian dollar.
In its outlook, Torstar said that revenues in its Media division will continue to face challenges from the turbulent economy and hesitant advertisers.
“Early indications in 2012 are that advertising revenues remain soft although no clear trend has emerged,” the company noted.
In the Harlequin division, the company said it is uncertain how the balance between rising digital sales and sliding print sales will play out. Harlequin will also face changes in author royalties, which have increased for the sale of digital items.
Torstar beefed up its assets in the three month period as well, making two newspaper acquisition deals.
The Toronto-based company paid $22.5 million to buy Performance Printing Ltd. of Smiths Falls, Ont., a publisher of community papers and ad flyers.
It also announced it will pay $51.5 million to take nearly full control of the Canadian chain of Metro free daily newspapers, which are read by more than one million commuters each day.
“More broadly, we’re just interested in taking positions that will we think will provide options to us in the future, a future that is obviously difficult to predict, but I think positioning matters,” Holland told analysts on the conference call.
“We’ve got positions across a very broad base of assets, and I think that will serve Torstar well as time passes.”
