After a recession that hammered revenue and drove the company into the red, Torstar Corp. posted a profit for the fourth quarter in a row.
The publisher of the Toronto Star and other community papers said Wednesday that a modest recovery in advertising, along with lower newsprint costs and savings from the largest restructuring in the company's history, helped to drive growth.
"The national [advertising]category in particular, and particularly at the Star, has been quite strong," said Torstar chief executive officer David Holland. Sales of automotive and financial advertising were particularly good at the national level, he said.
However, the company cautioned that it is still feeling the effects of a difficult economic environment. Advertising in the real estate and employment categories remained slow, "which raises concern about the strength of the economic recovery," said chief financial officer Lorenzo DeMarchi.
Torstar reported a profit of $22.7-million, or 29 cents a share in the quarter ended June 30, compared with a loss of $4.4-million, or 6 cents, in the same period in 2009.
Revenue was $376.5-million, up 0.8 per cent from the previous year.
Torstar's book publishing division, Harlequin Enterprises Ltd., also faced challenges in the quarter. The higher value of the loonie weakened Harlequin's earnings from sales in the U.S. and overseas.
The publisher of romance novels continued to see strong growth in digital sales thanks to the popularity of e-book readers. The digital division grew 79 per cent in the quarter, though it still accounts for just 7.2 per cent of worldwide revenues.
"I think it's very good for publishers to have that many different ways for consumers to access this content," Harlequin publisher Donna Hayes said. Harlequin's sales for the Amazon Kindle and the Barnes & Noble Nook reader were strong, she said.
Harlequin has also signed an agreement with Apple Inc., and will begin selling its books formatted for the iPad in the coming months.
"At what point will [the e-reader market]get big enough to matter? I think it's already big enough," Ms. Hayes said.
Torstar's stake in CTVglobemedia Inc., which owns CTV as well as The Globe and Mail, posted a loss of $6.8-million. That was an improvement over a year-ago loss of $27.6-million. Excluding special items, the CTV stake would have added $4.8-million to Torstar's bottom line in the second quarter, compared to $2.4-million a year earlier.
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