Gannett, America’s largest newspaper publisher, reported a 56 per cent drop in second quarter profits, blaming a sharp decline in advertising revenue.

The company, which also owns Newsquest, the second largest regional newspaper publisher in the UK, said that overall revenue fell 18 per cent to $1.4 billion (£850 million). Publishing revenues were down 25.8 per cent to $1.1 billion on the back of a 32 per cent decline in advertising revenue to $753.1 million.

At Newsquest, which owns 17 paid-for daily newspapers including The Argus in Brighton, the Oxford Mail and the Bradford Telegraph & Argus, advertising revenues were down 36.9 per cent. This compares with a 27.2 per cent decline in US advertising revenues.

The company, which owns more than 80 daily newspapers in the US, including America’s best selling newspaper, USA Today, said that it would continue with its efforts to reduce costs, a task made easier by falling newsprint prices. It recently announced plans to cut 1,400 jobs from a total of 41,500, having already cut around ten per cent of its workforce last year.

Gracia C. Martore, the company’s Chief Financial Officer, said that Gannett's digital business experienced strong revenue gains due to the consolidation of this CareerBuilder and ShopLocal divisions. Broadcasting revenues declined by 21 per cent.

Excluding writedowns and layoff charges, Gannett reported a profit of 46 cents a share from $1.04. Net income was 30 cents a share, compared with a loss of $10.03 a share in the quarter a year ago. Last year’s loss included a writedown and other charges.

Gannett shares rose 20 per cent in pre-market trading from a close of $3.49 on Tuesday on the New York Stock Exchange, as the profits were ahead of Wall Street expectations of 37 cents a share, according to Reuters Estimates.

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