Transcontinental to cut costs

Photo: Contributed

Transcontinental says it will continue to cut costs and accelerate its shift to digital publications next year to offset declining advertising and newspaper circulation.

The Montreal-based commercial printer and media company says printing revenues should be stable in 2017 thanks in part to a contract to print the Toronto Star.

However, that should be offset by lower volumes from some newspaper publishers and a reduction in print advertising.

In its media sector, cost reductions should partly offset the continuing impact on its publishing activities from the transformation of advertising spending.

The packaging segment, which grew in 2016 following acquisitions, is expected to continue to improve.

Transcontinental (TSX:TCL.A) issued its outlook for 2017 as its fourth quarter profit fell from a year ago when it benefited from an adjustment to deferred tax assets in the United States and the reversal of financial expenses.

The company earned $57.7 million or 75 cents per share in its latest quarter, down from $100.2 million or $1.28 per share a year ago.

Excluding unusual items, it earned $76.6 million or 99 cents per share in its latest quarter compared with $60.6 million or 78 cents per share in the fourth quarter of 2015.

Revenues grew 2.9 per cent to $555.6 million from $540.1 million a year ago.

Transcontinental was expected to earn 74 cents per share in adjusted profits on $536 million of revenues, according to analysts polled by Thomson Reuters.

For the full year, Transcontinental earned $146.3 million or $1.89 per share on $2.02 billion in revenue. That compared with a profit of $262.6 million or $3.36 per share on $2.00 billion in revenue last year.

On an adjusted basis, the company said it earned a full-year profit of $196.3 million or $2.53 per share, up from $186.7 million or $2.39 per share a year ago.