Torstar Corp posts profit as sale of Harlequin plans to eliminate paywall

TORONTO — Torstar Corp. (TSX:TS.B) reported a third-quarter profit of $125.3 million as the sale of its Harlequin romance book business boosted its bottom line.The newspaper publisher said Wednesday the profit amounted to $1.56 per diluted share for the quarter ended Sept. 30 compared with a loss of $70.9 million or 89 cents per diluted share a year ago.However, excluding the sale of Harlequin, the company reported a net loss from continuing operations of $87.0 million or $1.08 per share in the third quarter compared with a loss of $80.2 million or $1.01 per share in the same quarter last year.Torstar also said the Star Media Group has signed a deal with La Presse to develop a new tablet product for the Toronto Star based on technology and experience the Quebec publisher developed when producing its own publication for the iPad.Torstar expects to spend $1 million to $2 million in the fourth quarter on the project and an additional $10 million to $12 million in 2015. The company said the Toronto Star also anticipates eliminating the paywall in 2015 with some potential impact on circulation revenue.Operating revenue slipped to $199.9 million from $215.7 million in the third quarter of last year.Torstar sold Harlequin to global media company News Corp. for $455 million.“We were pleased to complete the sale of Harlequin in the third quarter and all outstanding debt was retired using a portion of the sale proceeds,” Torstar president and chief executive David Holland said in a statement.“Looking forward, for the balance of the year, we expect continued challenges in print advertising revenues combined with relative stability in multi-platform subscriber revenues and flyer distribution revenues.”In its outlook, Torstar said its Metroland Media Group and Star Media Group face continued challenges due to a shift in spending by advertisers seen across the industry and that the trends seen in the last six months are expected to continue into the fourth quarter.However, the company said multi-platform subscriber revenues and flyer distribution revenues are expected to be relatively stable in the balance of the year.