Transcontinental Inc. beat expectations even though its core earnings fell in the fourth quarter owing to lower revenues from continuing challenges in its printing sector.
The Montreal-based printer and packaging company says earnings, excluding proceeds from the sale of its California printing facility and other one-time items, decreased nearly 20 per cent to $69.9-million or 80 cents a share, from $87-million or 99 cents per share in the fourth quarter of 2018.
Net earnings increased to $112.3-million, or $1.28 a share, for the period ended Oct. 27, compared with $67-million, or 67 cents a share, a year earlier.
Revenue decreased 4.6 per cent to $790.9-million while adjusted revenue before the accelerated recognition of deferred revenue was $779.2-million, both compared with $829.2-million in the prior year period.
Transcontinental was expected to earn 72 cents a share in adjusted profits on $785.4-million in revenue, according to financial markets data firm Refinitiv.
Chief executive François Olivier said the full year was marked by the integration of packaging firm Coveris Americas, which marked a turning point in its transformation from a commercial printer and media company.
“In only two years, we grew our revenues by 50 per cent to reach more than $3-billion in 2019, a first in our company’s history,” he said in a statement. “We executed on our growth strategy and rigorously managed risk. I am very pleased with our company’s evolution in positioning us to create long-term value.”
For the full year, revenue increased 15.8 per cent to $3.04-billion owing largely to acquisitions.
Net earnings fell 22 per cent to $166.1-million from $213.4-million. Adjusted profits were $220.2-million, or $2.52 a share, down from $239.4 million, or $2.91 a share, in 2018.
Packaging operating earnings margins improved, but Mr. Olivier added the printing sector faced another difficult year “marked by the greater than expected decline in our revenues from retailer-related services.”
“In the coming years, we will continue optimizing our printing platform and seize growth opportunities in certain promising verticals, such as book printing and in-store marketing products.”
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