MCLEAN, Va. (TheStreet) -- Gannett (GCI - Get Report), continuing to lift itself off the canvas after a near knockout earlier this year, pre-announced better-than-expected third-quarter profit Tuesday.

The company said its adjusted per-share earnings for the third quarter will blow past Wall Street expectations by at least a dime. It now expects to show a profit of 39 cents to 42 cents. Analysts were looking for 29 cents.

The news sent Gannett shares higher by 18%, or $1.83, to $11.81 on heavy volume in morning trading Tuesday. The stock has rocketed some 270% since early July.

The nation's biggest newspaper chain and publisher of the USA Today had struggled earlier this year with heavy debt loads and, like all media companies, with plunging ad sales.

The latter still remains a problem. Gannett said it expects to post revenue for the quarter of between $1.3 billion and $1.32 billion, just below consensus Wall Street targets of $1.38 billion and last year's figure of $1.64 billion.

But Gannett continued to pump what it sees as a bottom to the ad recession, saying that its sales declines have slowed relative to earlier this year. "Although overall advertising revenue comparisons remain difficult, our third quarter year-over-year publishing comparisons improved again versus first- and second-quarter comparisons," the company said in a press release.

Gannett's earnings surprise was due to stringent cost cuts and a decline in the price of newsprint rather than any real strength in the ad business. Still, improved cash flow during the third quarter allowed the company to pay down about $195 million in debt. Gannett's balance sheet now shows total debt of $3.3 billion, less by more than half a billion dollars from the end of 2008.

The company's refinancing push continued Tuesday as well. In a separate statement, Gannett said it will sell $400 million worth of senior notes in a private placement and use the money to pay off other higher-interest debt.

Gannett will officially report third-quarter results on Oct. 19.

Other newspaper stocks were helped by the Gannett news Tuesday. Lee Enterprises ( LEE - Get Report) led the beaten-down sector to the upside. Its shares soared 47%, or 98 cents, to $3.12, on heavy volume.

Elsewhere, shares of the New York Times ( NYT - Get Report) rose 7%, E.W. Scripps ( SSP - Get Report) added 8%, Journal Communications ( JRN) gained 6.4%, and McClatchy ( MNI - Get Report) jumped 7.6%.

-- Written by Scott Eden in New York

Follow TheStreet.com on Twitter and become a fan on Facebook.

Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.