Gannett Company Inc. (GCI - Analyst Report), the publisher of one of the country's largest-selling daily newspapers, USA Today, and an S&P 500 company, is scheduled to report its third-quarter 2012 financial results on October 15, 2012.

The current Zacks Consensus Estimate for the quarter stands at 54 cents per share, indicating an estimated year-over-year increase of 21.8% from the prior-year quarter. Revenue, as per the Zacks Consensus Estimate, is $1.3 billion.

Second-Quarter 2012, a Synopsis

Gannett’s second-quarter 2012 earnings of 56 cents a share surpassed the Zacks Consensus Estimate of 53 cents. However, the quarter’s earnings fell 3.4% from last year's 58 cents. Including one-time items, earnings came in at 51 cents a share, down 17.7% from 62 cents earned in the year-ago quarter.

Gannett's total revenue inched down 2.1% to $1,307.0 million from the prior-year quarter, due to a fall in revenue across the Publishing segment, partially offset by gain at the Broadcasting and Digital segments. Total revenue also fell short of the Zacks Consensus Estimate of $1,321 million.

Agreement of Estimate Revisions

Estimate revisions for Gannett have been portraying an upward trend for the upcoming quarter as 3 out of 7 estimates have been revised upwards, while none were lowered in the last 30 days. However, for 2012, 1 out of 7 estimates has been revised in the upward direction, while one moved in the opposite direction.

Over the last 7 days, 1 out of 7 estimates was revised in the upward direction, while none was lowered for the third quarter of 2012.

The analysts believe that the challenging macro economic outlook continues to remain a drag on the company’s results. However, Gannett is taking initiatives to diversify its business model by adding new revenue streams in an effort to make it less susceptible to economic adversities.

Gannett is repositioning itself for improvement in print and digital media through a new subscription based model and on the other hand, the company limits the number of free articles that a non-subscriber can access and is enhancing the pricing structure.

Magnitude of Estimate Revisions

Given the upward estimate revisions, the Zacks Consensus Estimate for the third quarter inched up a penny to 54 cents in the last 7 days, while, 2012 estimates remained stable at $2.23 a share.

Surprise History

With respect to earnings surprises, Gannett surpassed the Zacks Consensus Estimate in three quarters and lagged behind in one, out of the last four trailing quarters. Earnings surprise range from a negative 2.2% to a positive 9.7%. The average remained at a positive 4.4%, indicating that the company has outperformed the Zacks Consensus Estimate by the same magnitude over the trailing four quarters.

Our Recomendation

Currently, we have a long-term Neutral recommendation on the stock. However, Gannett, which competes with The New York Times Company (NYT - Analyst Report), holds a Zacks #2 Rank that translates into a short-term Buy rating.