(Montreal) Transcontinental’s profitability is under pressure due to a drop in flyer printing volumes.
The printer and packer’s net profit fell from $18.4 million to $1 million in the first quarter (ended Jan. 29), the Montreal-based company announced on Wednesday. Revenues, for their part, rose by 2.4% to 707 million.
Adjusted diluted earnings per share were 24 cents, compared to 35 cents in the same period last year. Prior to the earnings release, analysts had expected earnings per share of 41 cents, according to financial data firm Refinitiv.
The company explained that print volumes were down for flyer printing and distribution businesses. She warned that adjusting print prices in an inflationary environment is expected to negatively impact volumes in fiscal 2023.
Management intends to turn to cost reduction to mitigate the headwinds. “Our team has a strong track record of adjusting our cost structure and has already implemented measures to mitigate the impact of lower demand,” President and CEO Peter Brues said in a statement. . We are seeing the first beneficial effects of our measures and we will continue to adjust if necessary. »
In the packaging sector, the company said that adjusting prices for raw material inflation compensated for lower volumes.
The action of Transcontinental lost 21 cents, or 1.36%, to $15.22 on the Toronto Stock Exchange at the end of the morning.
Company in this story: (TSX: TCL.A)