By Trevor Shackelford November 9, 2005 -- Quebecor World (NYSE: IQW) announced their third quarter results today. Results are from continuing operations only, and do not include those assets which are considered non-core and are currently up for sale. Revenue was up slightly to $1.58 billion from $1.57 billion last year. Net income for the quarter was $31 million, down 33% from $46 million during the same period last year. Earnings per diluted share were $0.16 down 43% from $0.28 last year. Results this quarter included approximately $17 million, or $0.12 per share, in impairment of assets, restructuring, and other charges compared to $13 million, or $0.08 per share, last year. The company had difficulties with pricing pressures across most of its business units and continued problems in France and the UK. Topics of this summary: Quarter Highlights Segment Performance Guidance Raine Radar Q & A Quarter Highlights The company’s current equipment investment plan is on track and will include 22 wide-web offset presses. 5 will be in operation in US facilities during the fourth quarter An investment plan for European operations is expected to be announced during the first quarter of 2006 Cash restructuring costs for workforce reductions in France and in other plants across the company were $9.5 million SG&A costs were $95 million compared to $108 million in the same period last year Capital expenditures for the Q4 should be around $150 million Segment Performance North America Revenue during the third quarter was $1.25 billion, up slightly from last year. Operating income, before asset impairment and restructuring charges, was $100 million, down from $110 million last year. Direct mail saw a 5% increase in volume, offset by a 3% decrease in magazines. Retail saw a 4% volume increase and catalogs saw a 2% climb, but overall revenue in retail/catalogs was down excluding paper sales. Volumes in Canada were up slightly during the quarter. Overall, pricing pressures were the biggest negative factor for the North American segment. Europe Revenue for the segment was $271 million, down 8.4% from $296 million last year. Excluding the effect of foreign exchange, sales were down 8% year-over-year. Volumes fell 14%. The company continues to struggle in France and in the U.K. The company blames a lack of investment in the segment for most of the problems. Latin America Revenue for the segment was $54 million, up 21% from the same period last year. Excluding the impacts of currency and paper sales, sales for the segment was up 5%. Volume decreased 13% compared to last year, mostly due to the timing of directory production. Guidance The company provided no specific guidance for the fourth quarter 2005. Raine Radar The company has had a difficult time recently, last month warning that their earnings for the third and fourth quarter would be below last year’s results. The company has seen prices continue to erode, and does not see this changing anytime soon. While it is true that the market has been extremely competitive, competitors such as Donnelley have not seen the same reductions in the bottom line and in fact have seen profits grow. Last year at this time, Quebecor was discussing acquisitions but the company has since realized that it has let its own operations languish. The first new presses have been installed, but the bulk of the equipment probably won’t come online until next year. Unfortunately, European investments won’t happen until next year at the earliest, meaning that French operations will probably continue to suffer. In the short term at least, a turn-around is unlikely, but the company should start to see operational improvements kicking in during the back half of 2006. Q & A The company expects between $350 million to $400 million of capital expenditures during 2006. The company is expecting EBITDA improvement in 2006. Quebecor is well within its debt covenants, which are not public. The shift to digital and online business has changed the printing business, with customers demanding faster turn-around and better quality. Despite this change, the company is optimistic about the future of the industry. Senior management has expressed confidence in its North American management team. The company is not currently considering abandoning its European operations.