Canada's Quebecor Halves Profit as Newspaper Losses Mount
TORONTO – Quebecor’s once-mighty tabloid newspapers are bleeding red ink.
The Quebec media giant on Wednesday posted first-quarter earnings down sharply as it failed to cut losses at its struggling newspaper division.
Quebecor, which has Canada's largest newspaper chain and titles like the Toronto Sun and Le Journal de Montreal, saw earnings for the three months to March 31 halve to $35.6 million, against a profit of $71.4 million in 2012.
Overall revenue was off 1 percent to $1.05 billion, as revenue falls in Quebecor’s broadcast, interactive technologies and leisure and entertainment divisions was offset by gains in its two-year-old mobile telephony business.
Increased wireless phone subscriptions helped mobile telephony revenue to rise 4 percent to $668.8 million.
But Quebecor posted a steep revenue drop at its newspaper division, where cost-cutting failed to keep pace with advertising sales losses.
Overall news media revenue fell 10.9 percent to $207.6 million.
“In addition to intense competition from new media, traditional newspaper are also facing large reductions in advertising spending by local and national advertisers,” said Pierre Karl Peladeau, who is shortly to be replaced as president and CEO by Robert Depatie as he becomes board chairman, in a statement.
Quebecor recently cut 500 jobs at its newspaper division and unveiled plans to install paywalls in a bid to revive the business.
Quebecor also secured less gains on the valuation of financial instruments during the quarter.