S&P cuts ratings on Gannett Co. to near junk

The agency lowered its long-term corporate credit rating and senior unsecured debt rating to "BBB-" from "BBB+" and the short term rating to "A-3" from "A-2."

Gannett's newspaper ad revenue is down 14 percent in the first nine months of the year and the nation's largest newspaper publisher may face double-digit percentage declines in revenue and operating profit in 2009, said analyst Emile Courtney.

"The rationale underlying our maintenance of an investment-grade rating for Gannett reflects our expectation that the company will continue its conservative financial policy," Courtney wrote.

The long-term rating outlook remained negative but all ratings were taken off CreditWatch.

Gannett announced some 1,100 job cuts this summer among its local newspapers, and said last month new job cuts are likely by the end of the year after reporting third-quarter profit fell 32 percent.

Late Monday, Moody's Investors Service also downgraded Gannett Co.'s senior unsecured rating by two notches to a "Baa2" grade, citing ongoing pressures on newspaper advertising.

Gannett shares fell 44 cents, or 4.4 percent, to close at $9.59 Tuesday.