• by Erik Sass  @eriksass1, September 9, 2009

Don't hold your breath waiting for a recovery in the newspaper business in the third quarter. Losses will probably continue at the same rate as previous quarters, judging by a recent note to clients from three analysts with Wells Fargo -- John Janedis, Jaime Morris, and Brendan Metrano -- based on their analysis of a leading newspaper publisher.

In their note, the trio warned that Gannett Co., the largest newspaper publisher in the nation, will probably experience an advertising revenue decline of 28.8% in the third quarter. This figure was revised from their earlier prediction of a 25.5% drop. According to the analysts, that will be followed by a 20.2% decline in ad revenue in the fourth quarter.

Although the Wells Fargo analysis focused on Gannett, in the past the company has proven to be an accurate indicator for the fortunes of the newspaper business in general. That is indicated by Wells Fargo's "market perform" rating, meaning that Gannett is keeping pace with its peers.

Gannett's total publishing ad revenues declined 22.7% in the fourth quarter of 2008, 26.9% in the first quarter of 2009, and 27.2% in the second quarter of 2009.

That aligns closely with the industry's overall revenue declines of 19.7%, 28.3% and 29%, respectively, according to the Newspaper Association of America.