NEW YORK ( TheStreet) -- Major newspaper publishing companies with a broadcast component outperformed companies that rely solely on publishing in the third quarter, thanks to an uptick in political advertising.

Analyst Edward Atorino of Benchmark explained in an Oct. 20 research note that the newspaper industry is currently facing several economic risks due to lower overall advertising spending.

"Traditional advertising media are facing increased competition from the Internet and other new media alternatives," he said. "The migration of advertising to the Internet may continue to hinder most traditional advertising formats, especially newspapers."

Newspaper companies with a broadcast segment, however, benefited from the increased political spending in the third quarter.

Gannett ( GCI) saw earnings rise 37.5% in the third quarter, driven by strong gains in its broadcasting segment.

The USA Today publisher's shares dropped more than 8.5% after earnings per share came in at 43 cents, below most analysts' estimates of 50 cents.

Still, its 22.3% increase in broadcasting revenue helped keep overall revenue flat by offsetting a 4.8% decline in publishing revenue.

The increase in broadcasting revenue was primarily due to increased political advertising. Television advertising was up about 26% in the quarter alone.

"Reflecting our strong footprint and ratings, our television business achieved substantial revenue growth both in its core business and in political ad spending," chairman and CEO Craig Dubow said in the quarterly report.

Management expects the strong political ad spending trend to carry over through the next quarter and projects "the percentage increase in television advertising revenues to be in the mid to high twenties for the fourth quarter of 2010 compared to the fourth quarter of 2009."

Journal Communications ( JRN) saw a triple-digit gain in earnings, reporting a profit of $6.3 million in the third quarter.

Revenue increased 1.7% even though revenue from its one daily newspaper, the Milwaukee Journal Sentinel, fell 6.4%. The weak publishing revenue was offset by a 14.2% boost in the company's broadcast revenue from its 33 radio stations and its 13 television stations.

The New York Times ( NYT), publisher of the Times and The Boston Globe reported a loss of $4.3 million in the third quarter. Its revenue dropped 2.7% during the quarter as total advertising revenue was down 1% and circulation fell 4.8%.

Following the report, analyst John Eade of Argus downgraded the publishing company to a hold from a buy and dropped his estimated earnings per share to 58 cents from 70 cents for 2010.

Major stockholder Harbinger Capital Partners ( HRG) sold 2.9 million shares following its weak third quarter report, bringing Harbinger's stake down to 7.4%.

Harbinger has been steadily divesting shares throughout the year.

New York Times shares are down more than 38% over the past year and are trading around $7.70

McClatchy ( MNI) also saw a decline in its print advertising revenue in the third quarter due to weak print ad trends.

The company reported that its third-quarter revenue was down 6% to $328 million. Its total advertising revenue fell 6% primarily due to an 8% drop in print advertising revenue.

-- Written by Theresa McCabe in Boston.

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