Yellow Media (TSX:YLO) said Tuesday it had $24 million of net earnings in the third quarter, or four cents per share.
The profit was a big turnaround from the same time last year when Yellow Media took a huge writedown on assets that resulted in a net loss of $2.8 billion.
"Overall, we remain committed to creating an industry-leading media and marketing solutions company," chief executive Marc Tellier told financial analysts on a conference call.
"As reflected by our operation initiatives and results to date, Yellow Media continues to make progress on its business transformation."
But revenues fell 17 per cent year over year to $267.7 million from $323.4 million as a result of lower print revenues, discontinued directories and the sale of an online classified ad site in November 2011.
Yellow Media, which is in the process of restructuring to reduce its debt, said its adjusted earnings were a better measure of its ongoing business because they exclude a number of one-time items.
Adjusted earnings were $77.1 million or 15 cents per share in the latest quarter. That compared with $69.2 million or 14 cents per share in adjusted earnings last year.
Analysts polled by Thomson Reuters had estimated 10 cents in earnings per share and revenue of $264.47 million.
The company — which printed its first directory in 1908 when it was still part of Bell Canada — has been transforming itself in recent years as consumers find information about local businesses online and on mobile devices.
Online revenues for the quarter were $92 million compared with $87.3 million last year, representing growth of 5.3 per cent year over year, Yellow Media said.
Tellier noted a recapitalization plan to pay down $1.8 billion in debt had been approved by Yellow Media's debtholders, shareholders and convertible debenture holders. A final ruling on the plan by the Quebec Superior Court is pending.
"We need to implement the proposed recapitalization, which will provide the company with the financial flexibility critical in supporting its business transformation," he said.
Last winter, Yellow Media announced a shakeup in its board of directors and brought in experts in restructuring and corporate finance to help deal with its heavy debt. The company also cancelled its shareholder dividend.
Tellier reiterated that Yellow Media's transition to a digital company from a print company will take time.
But he noted a year-over-year increase in downloads of Yellow Media's mobile application to 4.7 million from about three million.
"Whether it be online or through their mobile devices, consumers are constantly searching for local information to make smarter, more informed shopping decisions within their neighbourhood or any neighbourhood they might find themselves in."
Yellow Media builds websites for small- and medium-sized businesses and provides such services as email marketing, search engine marketing and video production.
Tellier said Yellow Media's 360 Solutions, which includes online, mobile and print media advertising and website services, attracted more advertisers choosing three or more of its services. It showed year-over-year growth of 14 per cent in the quarter compared with 4.1 per cent growth in the year-earlier period.
Yellow Media owns a number of publications including Yellow Pages print directories, YellowPages.ca, Canada411.ca and RedFlagDeals.com.
Shares in Yellow Media were up half a cent at eight cents in late-day trading Tuesday on the Toronto Stock Exchange.