Canadian stocks: Transcontinental’s earnings rise on new printing contracts

Transcontinental Inc., symbol TCL.A on Toronto, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental also has over 250 web sites. These web sites will become more important to the Canadian stock’s growth in the next few years, as advertisers spend more on the Internet than print products. In the three months ended January 31, 2011, Transcontinental earned $29.9 million, or $0.37 a share. That’s up 10.3% from $27.1 million, or $0.34 a share, a year earlier. These figures exclude writedowns and other non-recurring items. On this basis, the Canadian stock’s latest earnings beat the consensus estimate of $0.36 a share. Revenue rose 3.6%, to $530.1 million from $511.6 million. Transcontinental has won a number of new printing contracts. In October, the company expanded its contract to print The Globe and Mail newspaper to Alberta and British Columbia. This will add $25 million to its annual revenue. It also won a new contract to provide printing and marketing services to Canadian Tire. This four-year deal will begin in January 2012, and will add an additional $30 million to $40 million a year to Transcontinental’s revenue. You can get our latest analysis, including our clear buy/sell/hold advice, on Transcontinental and dozens of other Canadian stocks you may be considering buying in The Successful Investor. What’s more, you can get one month free when you subscribe today. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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