Gannett Co. Inc. (GCI), the publisher of the nation’s largest-selling daily newspaper USA Today, recently reported better-than-expected fourth-quarter 2009 results buoyed by effective cost-cutting measures and lower newsprint expense. Operating expenses dropped 16.2%.

The quarterly earnings of 72 cents a share outstripped the Zacks Consensus Estimate of 63 cents, which has remained stagnant for the last 30 days. In the last 7 and 30 days, only one out of seven analysts covering the stock raised their estimates for the quarter.

Gannett’s quarterly earnings topped the Zacks Consensus Estimate by 14.3%. The company’s earnings surprise history for the preceding four quarters varies between 3.7% and 24.3%, with the average being 13.1%. In the third and second quarters, the company had outperformed the Zacks Consensus Estimate by 15.8% and 24.3%, respectively.

However, earnings fell 15.3% year-over-year from 85 cents posted by Gannett in the prior-year quarter due to a 14.4% decline registered in the total revenue of $1,485.3 million. Although management hinted an improvement in the advertising environment with the U.S. and U.K. economies showing some signs of recovery, shares of Gannett slid 7% in afternoon trading.

On a reported basis Incorporatedluding one-time items, Gannett said that quarterly earnings came in at 56 cents versus a loss of $20.65 per share delivered in the year-ago quarter.

The rate of fall in publishing advertising has shown a deceleration in fiscal year 2009, showing signs of revival in advertising demand. Publishing advertisement revenue tumbled 17.9% to $790.8 million, after falling 28.4% in the third quarter, 32.0% in the second quarter and 34.1% in the first quarter. Publishing circulation revenue also dipped 4% to $290.3 million.

Broadcasting revenue slipped 13.9% to $183.2 million due to the absence of political advertising, besides a sustained softness in the automobile category. Digital revenue also fell 7.2% to $157.7 million due to sluggishness in the employment advertising demand that affected CareerBuilder’s results, partly offset by a sharp rise in revenue at PointRoll and ShopLocal.

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