Slowing economy hands Torstar a loss
Posted on 30 April 2008 by Jack
Shares in Torstar Corp. fell to their lowest point in eight years Wednesday as the newspaper and book publisher reported a drop in earnings across all of its major divisions.
The stock experienced one of its biggest single-day drops this year, falling almost nine per cent in early afternoon trading, after the company reported first-quarter results that one analyst characterized as “significantly below expectations.”
The shares fell to 15.67, a decrease of $1.48, to reach their lowest point since early 2000.
Slowing advertising sales amid a softening economy, and a one-time $20.8-million restructuring charge, led to a first-quarter loss of $3.5-million.
That loss, which equated to 4 cents a share, was down from a profit of $15.7-million, or 20 cents a share, during the same quarter a year ago.
First quarter revenue fell 6.8 per cent to $351.7-million, compared to $377.4-million last year.
Torstar, which publishes the Toronto Star newspaper, dozens of community papers across Ontario and the Harlequin line of books, has started seeing the impact of slowing ad sales in its key Ontario markets.
Torstar chief executive officer Rob Prichard told shareholders at the company’s annual meeting that several other factors contributed to the drop in revenues, including a lost printing contract and sluggish retail sales of its Harlequin books.
“Different media face tough challenges at different times, large metro daily papers are particularly challenged at present across North America, and we face these same headwinds at the Toronto Star,” Mr. Prichard said.
“This was not the start we wanted for the year, after delivering four good quarters last year, and we are determined to grow again this year.”
Analyst Drew McReynolds of RBC Capital Markets said the results were significantly below expectations.
Popularity: 19% [?]
April 30th, 2008 at 6:50 pm
It’s interesting to note that although the Star was the first to drop it’s subscription firewalls and add RSS, they seemed to have stopped there. The Globe and Post have continued making their online editions more interactive, the Star seems to have stalled. Many of their community papers are just now starting to add RSS and drop the subscription walls. There was little I could find in the way of comments, feedback etc. Their frontpage tries to be everything to everyone and fails miserably. With the slow and steady march of ad dollars online, this has to be a serious concern.
May 1st, 2008 at 12:08 am
This presents the perfect case study to illustrate the wisdom of the The Star’s editorial page. The publisher should wholesale follow the advice of the editorial page and according to the editorial gospel the publisher should immeadiatley increase all wages for all of his workers based on number of years of loyalty, with bonuses based on sad sack decision making, devotion to CYA and union apathy. As a result of profligate spending in dire times The Star will turn a meagre profit as befits a bastion of leftist lecturing. No whining about unfairness, then, snap to it ladies and gents, there are laws of commerce waiting to be overturned by ideology.