PW: Earnings Soft at Harlequin, Torstar Education Unit

Worldwide sales at Harlequin fell to C$490 million, although operating profits inched up to C$81.3 million from C$80.9 millon. The minimal increase was due to a strong performance in Harlequin's Overseas Group, where profits rose by C$4 million to C$36 million. In North America, operating profits fell to C$45 million from C$48 million, due to an 11% decline in retail unit sales as well as new product development costs. Torstar said that price increases in the North American and overseas markets in 1998 should offset increases in paper costs and increased spending on Harlequin's romance business and new initiatives.

In the supplementary education segment, operating profits fell to C$2.1 million from C$5.1 million, despite an increase in sales from C$56.7 million to C$216 million. Approximately C$148 million of the revenue gain came from acquisitions in late 1996 and 1997, and although three of the acquired companies have added to earnings, Troll has lost C$5 million since Torstar acquired it last July (News, July 7, 1997). Torstar is implementing a number of product and management changes at Troll, although the company said it expects the integration of Troll to extend well into 1998.