MONTREAL – Declining newspaper advertising revenue in Quebecor’s news media division sent the company’s first quarter profits plunging, despite increased revenue from its telecommunications business.
Quebecor recorded Q1 2013 profit of $35.6 million, or $0.57 per basic share, on revenues of $1.05 billion, basically half of Q1 2012’s profit of $71.4 million, or $1.13 per basic share. Overall revenues decreased by 0.9% to $1.05 billion. While Quebecor’s telecommunications revenue increased by 3.6% to $23.0 million, that was offset by sharper declines in news media (down 10.9%), leisure and entertainment (down 9.4%), broadcasting (down 2.1%), and interactive technologies and communications (down 3.8%).
The combined loss in revenues in those segments totalled $35.6 million for the first quarter of 2013, with news media accounting for much of that amount with $25.5 million.
“Unfortunately, in the news media segment, the latest cost-containment initiatives did not make up for the decrease in revenues during the quarter, which was more significant than in previous periods,” said Quebecor chair Pierre Karl Peladeau in a release.
“In addition to intense competition from new media, traditional newspapers are also facing large reductions in advertising spending by local and national advertisers. Despite signs of a potential recovery in advertising spending in the coming quarters, news media segment management took immediate steps to adjust its cost structure again in light of the conditions experienced in the first quarter of 2013.”
