A decline in advertising revenues pulled down the third-quarter results of newspaper and book publisher Torstar Corp. and executives at the company warned Wednesday that uncertainty in the ad market will prevail in the coming months.
The company, which owns the Toronto Star and other newspapers, as well as the romance novel brand Harlequin, said advertising sales started off strong as the third quarter got underway, but quickly eroded through the three-month period and into October.
“The advertising environment continues to feel challenging and visibility remains limited on how advertising revenues will evolve over the balance of the year,” said chief financial officer Lorenzo DeMarchi in a conference call.
Torstar said its third-quarter net income fell to $14.1 million, or 18 cents per share, from $25.2 million or 32 cents per share a year earlier.
Revenue for the three months ended Sept. 30 was $355.3 million, down from $378.7 million a year before.
Adjusted earnings, which exclude restructuring expenses and other items, fell to 29 cents per share, missing analyst expectations of 33 cents per share, according to a poll by Thomson Reuters.
Meanwhile, the company is looking at ways to further reduce expenses in its media division, said president and chief executive David Holland.
“Given this challenging revenue environment, we are committed to and continue to pursue opportunities to reduce cost,” he told analysts.
The company expects to book $5.2 million of cost savings in the fourth quarter and $9.5 million of incremental savings in 2013 from restructuring initiatives that were taken through the third quarter of 2012.
On Monday, Toronto Star publisher John Cruickshank told readers in note that it plans to launch a digital subscription model that will fall in step with its competitors, which include The Globe and Mail and the National Post.
The announcement comes as Canadian publishers look for new ways to drive revenues as more readers gravitate towards the online version of their daily papers, using their computers, tablets and smartphones. The shift is eroding print advertising revenues in favour of less lucrative online ad sales.