Harlequin parent company Torstar reported last week that the sales at the publisher fell 6.8%, to C$107.8 million, while operating earnings declined to C$18.8 million from C$23.8 million in the third quarter ended September 30. The drops included the negative impact or foreign exchange. Excluding foreign exchange, revenue was down C$6.0 million with revenue in North America off C$4.2 million due to declines of C$2.1 million in retail print, C$2.0 million in direct-to-consumer revenues and about C$100,000 in digital revenues. Overseas group revenue was down C$1.8 million.
On the earnings side, profits in North America were down C$4.6 million and Overseas group operating earnings fell C$100,000.
In commenting on results, Torstar said the shift in retail sales in North America from print to digital began to moderate in the second quarter and the trend continued into the third quarter of the year. This is the second quarter where print revenues have increased and digital revenues have remained relatively stable versus the prior period, Torstar said. The timing of higher digital marketing spending in addition to the initiation of higher author royalties for digital sales have also impacted results in the quarter and year to date. Overall, North America sales were also hurt by the popularity of Shades of Grey.
The Overseas markets, Torstar said, continue to be negatively impacted by economic conditions in Europe. In the third quarter and year to date, the retail print and direct-to-consumer revenue declines more than offset the digital revenue growth. In the quarter, lower operating earnings in most countries were partially offset by continued strong results in Germany related to digital growth. Similarly, year to date operating earnings were down in many countries with the U.K. and Germany providing some offset as a result of the digital growth.
Global digital revenues accounted for 20.3% of total revenue in the third quarter compared to 15.8% in last year’s third quarter, and accounted for 20.4% of total revenue year to date in 2012, up from 14.8% in the comparable period last year
