orstar Corp (TSb.TO), the owner of one of Canada's largest circulation daily newspapers, reported lower-than-expected quarterly revenue on Wednesday, as a decline in print advertising outweighed growth in its digital businesses.
The company's shares nevertheless jumped 5.9 per cent to $1.79 as its adjusted earnings beat expectations and an online forum business in which it holds a majority stake showed solid growth.
Torstar, which publishes the Toronto Star and a string of other titles, has struggled to offset the steady defection of advertisers from newspapers to social media and search sites such as Google.
Its Star Touch tablet app, launched in September 2015, has disappointed executives and investment in the project will fall to between $2 million and $4 million in 2017 compared with around $11 million last year, they said on a conference call with analysts.
"There are just not as many people (using it) as we would like," said Chief Executive Officer and acting Publisher David Holland. "At least I can say we tried," he said.
Holland, whose retirement was first announced in July, will step down on Friday and a successor announced "very soon," the company said.
Print advertising revenue fell 13 per cent in the fourth quarter ended Dec. 31, while revenue in its digital ventures climbed 5.5 per cent.
That business includes its majority stake in online forum company VerticalScope, which executives said should notch high single-digit organic earnings and revenue growth in 2017.
Revenue dropped a bigger-than-expected 12 per cent to $188.4 million. Analysts' on average had expected revenue of $210.3 million, according to Thomson Reuters I/B/E/S.
The publisher said overall revenue at Metroland Media Group and Star Media Group was expected to be stable this year.
The company said net income attributable to shareholders was $1.3 million, or 1 cent per share, in the quarter ended Dec. 31, compared with a loss of $234.8 million, or $2.91 per share, a year earlier.
On an adjusted basis, the company earned 16 cents per share, beating the 8 cents per share expected by analysts, according to Thomson Reuters I/B/E/S.
Famed investor Warren Buffett said earlier this week that only two U.S. newspapers are certain to survive the industry's challenges.
They are the New York Times and the Wall Street Journal, because each has "developed an online presence that people will pay for," he told CNBC.