Newspaper Pain Is Transcontinental's Gain as Printing Jobs Shift

  • Torstar joins Postmedia, Globe in outsourcing printing
  • Transcontinental stock is up as publishers have tanked

Transcontinental Inc. has emerged a winner from the decline of Canada’s print media industry as the Montreal-based publisher picks up printing contracts from newspapers looking to cut costs.

Transcontinental has gained 32 percent to C$16.27 since January 2012. In the same period, Postmedia Network Canada Corp. lost nearly 98 percent of its value to close Thursday at 18 Canadian cents and Torstar Corp. is down 73 percent to C$2.45.

Torstar said Thursday it was closing its printing plant, firing nearly 300 employees and outsourcing the work to Transcontinental in a bid to cut costs. The Toronto-based company joins Postmedia and closely held Globe and Mail, which already have contracts with the printer.

“This deal further demonstrates Transcontinental’s ability to ’win’ printing business in a soft environment,” Haran Posner, a Toronto-based analyst with RBC Capital Markets, said in a note to clients. Transcontinental also stands to gain if Quebecor Inc., another large Canadian publisher, follows Torstar and outsources more of its printing, he said.

Newspapers have struggled to find new sources of revenue as a shift to online and digital news hollows out print advertising and classifieds income. Cost-cutting has led to steady job cuts at Canadian newspapers and attempts at building out digital products like tablet and smartphone applications have yet to replace lost revenue.

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