MONTREAL — Transcontinental Inc. beat expectations even though its core earnings fell in the fourth quarter due to lower revenues from ongoing challenges in its printing sector.
The Montreal-based printer and packaging company says earnings excluding proceeds from the sale of its California printing facility and other one-time items, decreased nearly 20 per cent to $69.9 million or 80 cents per share, from $87 million or 99 cents per share in the fourth quarter of 2018.
Net earnings increased to $112.3 million or $1.28 per share for the period ended Oct. 27, compared with $67 million or 67 cents per share a year earlier.
Revenues decreased 4.6 per cent to $790.9 million while adjusted revenues before the accelerated recognition of deferred revenues were $779.2 million, both compared with $829.2 million in the prior year period.
Transcontinental was expected to earn 72 cents per share in adjusted profits on $785.4 million in revenues, according to financial markets data firm Refinitiv.
Chief executive Francois Olivier said the full year was marked by the integration of packaging firm Coveris Americas, which marked a turning point in its transformation from a commercial printer and media company.
“In only two years, we grew our revenues by 50 per cent to reach more than $3 billion in 2019, a first in our company’s history,” he said in a statement.
“We executed on our growth strategy and rigorously managed risk. I am very pleased with our company’s evolution in positioning us to create long-term value.”
For the full year, revenues increased 15.8 per cent to $3.04 billion due largely to acquisitions.
Net earnings fell 22 per cent to $166.1 million from $213.4 million. Adjusted profits were $220.2 million or $2.52 per share, down from $239.4 million or $2.91 per share in 2018.
Packaging operating earnings margins improved but Olivier added the printing sector faced another difficult year “marked by the greater than expected decline in our revenues from retailer-related services.”
“In the coming years, we will continue optimizing our printing platform and seize growth opportunities in certain promising verticals, such as book printing and in-store marketing products.”
This report by The Canadian Press was first published Dec. 12, 2019.