(Adds details from conference call, share move, background)
By Alastair Sharp
TORONTO, March 1 Torstar Corp, the
owner of one of Canada's largest circulation daily newspapers,
reported lower-than-expected quarterly revenue on Wednesday, as
a decline in print advertising outweighed growth in its digital
The company's shares nevertheless jumped 5.9 percent to
C$1.79 as its adjusted earnings beat expectations and an online
forum business in which it holds a majority stake showed solid
Torstar, which publishes the Toronto Star and a string of
other titles, has struggled to offset the steady defection of
advertisers from newspapers to social media and search sites
such as Google.
Its Star Touch tablet app, launched in September 2015, has
disappointed executives and investment in the project will fall
to between C$2 million and C$4 million in 2017 compared with
around C$11 million last year, they said on a conference call
"There are just not as many people (using it) as we would
like," said Chief Executive Officer and acting Publisher David
Holland. "At least I can say we tried," he said.
Holland, whose retirement was first announced in July, will
step down on Friday and a successor announced "very soon," the
Print advertising revenue fell 13 percent in the fourth
quarter ended Dec. 31, while revenue in its digital ventures
climbed 5.5 percent.
That business includes its majority stake in online forum
company VerticalScope, which executives said should notch high
single-digit organic earnings and revenue growth in 2017.
Revenue dropped a bigger-than-expected 12 percent to C$188.4
million. Analysts' on average had expected revenue of C$210.3
million, according to Thomson Reuters I/B/E/S.
The publisher said overall revenue at Metroland Media Group
and Star Media Group was expected to be stable this year.
The company said net income attributable to shareholders was
C$1.3 million, or 1 Canadian cent per share, in the quarter
ended Dec. 31, compared with a loss of C$234.8 million, or
C$2.91 per share, a year earlier.
On an adjusted basis, the company earned 16 Canadian cents
per share, beating the 8 Canadian cents per share expected by
analysts, according to Thomson Reuters I/B/E/S.
Famed investor Warren Buffett said earlier this week that
only two U.S. newspapers are certain to survive the industry's
They are the New York Times and the Wall Street Journal,
because each has "developed an online presence that people will
pay for," he told CNBC.
($1 = 1.3308 Canadian dollars)
(Additional reporting by John Benny in Bengaluru; Editing by
Sriraj Kalluvila and Andrew Hay)