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Transcontinental touches one-month high as Q2 earnings top estimates

Published: 04:04 06 Jun 2014 AEST

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Transcontinental Inc. (TSE:TCL.A), Canada's largest printer, rose to the highest in a month, after reporting better-than-expected earnings in its fiscal second quarter.

Shares gained 3.7 percent to C$15.65 at 1:19 p.m. in Toronto after reaching C$16.43, the highest intraday price since May 7.

Net income increased 13 percent to C$34.7 million, or 44 Canadian cents per diluted share, in the three months ended April 30, from C$25.3 million, or 32 Canadian cents per diluted share, a year earlier, the Montreal, Quebec-based company said in a statement today.

Excluding some items, Transcontinental earned 47 Canadian cents per share, above the 43-cents-per share estimate of analysts.

Revenue declined 3.8 percent to $498.2 million from $517.8 million. Revenue was hit by soft advertising sales, the company said.

"Despite the pressure we are experiencing in the advertising market, the increase in our profitability demonstrates the effectiveness of our strategy, namely strengthening existing assets and developing new revenue sources," Transcontinental's Chief Executive Officer Francois Olivier said in the statement.

This week, Transcontinental said its acquisition of 74 weekly newspapers from Sun Media, part of Quebecor Inc. (TSE:QBR.B) has been completed. Transcontinental agreed last week to put 34 newspapers up for sale for about two months to win approval from the federal Competition Bureau.

It has also completed the acquisition of Capri Packaging on May 3, which moves Transcontinental into a new industry segment that the company believes will provide growth opportunities. The acquisition will add about US$72 million to Transcontinental's revenue, with about 75 percent of that coming from the seller, Schreiber Foods Inc.

The company also declared a quarterly dividend of 16 Canadian cents on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on July 17 to shareholders of record at the close of business on June 30.


 

 

 

 

 

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