TORSTAR CORP. $9.10 - Toronto symbol TS.B

TORSTAR CORP. $9.10 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $727.1 million; TSINetwork Rating: Above Average; Dividend yield: 5.8%; www.torstar.com) reports that its earnings per share before one-time items fell 13.7% in the three months ended June 30, 2012, to $0.44 from $0.51.

The earnings drop is mainly due to weak advertising revenue at Torstar’s media division, which consists of over 100 newspapers, including its flagship newspaper, The Toronto Star, and related websites. This business accounts for 72% of the company’s revenue. The remaining 28% comes from its Harlequin book-publishing subsidiary.

Overall revenue fell 2.4%, to $383.9 million from $393.3 million. Revenue fell 2.2% at the media division and 2.9% at Harlequin.

The company is offsetting the lower revenue with layoffs and other cost-cutting moves. These actions should lower its annual labour costs by $4.0 million by the end of 2013.

Torstar is a buy.

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