NEW YORK —  The McClatchy Co. said Tuesday it recorded a third-quarter profit that beat Wall Street expectations, but the newspaper publisher saw advertising revenue erode more quickly in September.

Shares in the company gained more than 3 percent in midday trading.

Net income in the quarter that ended Sept. 28 was $4.2 million, or 5 cents a share. The company lost $1.3 billion, or $16.42 a share, in the same period a year ago, when it took a major accounting charge to reflect the poor conditions in the newspaper business.

In the latest quarter, net income excluding one-time charges was $10.4 million, or 13 cents a share. Analysts polled by Thomson Reuters, who also generally exclude one-time charges, were expecting a lower profit of 10 cents per share.

McClatchy's revenue fell 16 percent to $451.6 million, slightly below Wall Street estimates of $453.4 million. A year ago, revenue was $540.3 million.

Like the rest of the newspaper industry, McClatchy is suffering from steep declines in advertising. A downturn that began years ago with the migration of readers and advertisers to the Internet accelerated this summer as the weak economy prompted retailers and other companies to further cut back on promotions and other advertising spending.

The financial meltdown that began last month continues to depress consumer and ad spending as newspaper companies head into the normally lucrative holiday season.

Gary Pruitt, McClatchy's chairman and chief executive, said in a statement that "the advertising environment continues to be weak and we expect print advertising revenues to continue to be down. Thus far in October, advertising revenues are tracking similarly to September."

Combined revenue for print and online ads dropped 19.9 percent in September compared with a year ago, worse than the 19.5 percent reduction in June, which had been the year's steepest drop. McClatchy had a slight reprieve in August, when the drop was kept to 17.8 percent.

Although the September decline was highest all year, Benchmark Co. analyst Edward Atorino said the tumble wasn't that drastic compared with recent months.

"The rate of decline seems to be leveling off, which is perverse good news," Atorino said, adding that if October indeed mirrors September, "maybe it's going to stop getting worse."

Based in Sacramento, Calif., McClatchy has had greater difficulties than some newspaper publishers because it has several newspapers in California and Florida, including The Sacramento Bee and The Miami Herald.

Both markets have been hurt by the housing downturn, which in turn has affected real estate advertising. Help wanted and other classified ads have declined as the housing woes spill over to other sectors of the economy.

For the entire third quarter, advertising revenue fell 19 percent. Classified advertising revenue dropped 30 percent, while national advertising declined nearly 20 percent. Local retail advertising declined about 11 percent.

A gain of 9 percent in online advertising revenue could not offset a nearly 22 percent drop in print ads because Internet ads made up only 12 percent of overall advertising revenue.

To offset revenue reductions, McClatchy has announced two rounds of job cuts since June of about 10 percent each. McClatchy took a charge of $7.6 million in the quarter for severance and other restructuring costs. The company said it expects annual savings of $200 million combined from the two rounds.

The revenue decline has also put McClatchy in danger of missing financial targets required under debt agreements with lenders, and the company last month agreed to higher interest rates to gain more flexibility for about two years.

McClatchy took small accounting adjustments reflecting the higher rates and the reduction of its debt to about $2.07 billion, from $2.1 billion at the end of the second quarter.

Other adjustments include those related this year's sale of McClatchy's one-third share in a newsprint company.

For the first nine months of the year, McClatchy had net income of $23 million, or 28 cents a share, compared with a loss of $1.3 billion, or $15.89 per share, in the year-ago period, again reflecting the accounting charge. Revenue dropped 15 percent to $1.43 billion, from $1.69 billion a year ago.

Shares in the company gained 11 cents, or 3.2 percent, to $3.51 in midday trading Tuesday.

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