Newspapers were still losing ad revenue at a 25 to 30 percent pace year-to-year in the second quarter. They managed small profits with very tight expense control. Third quarter ad revenues will be down 20 to 25 percent compared to the 2008 period, which itself was off 18.1 percent compared to third quarter 2007.
So staying profitable will require continued vigilance on expenses. A little of that takes care of itself -- reduced paper use since so much less advertising and news is being printed. But companies targeting above average profit levels -- like Gannett -- or forced to keep profits up to handle a high level of debt -- like McClatchy -- will continue to work the outsourcing and down-sizing option.
As for the stock market, remember that share prices reflect investor consensus on future earnings over a year or 18 months and that the low base indicated investor fear that the companies would fail, now eased considerably.
A friend suggests that the end of the recession reports may be hyping what is at best a slow start to a long recovery. Even if you side with the optimists who believe GDP will grow more than 2 percent this quarter, that only begins to dig out of the hole of sharp declines in the last half of 2008 and the first quarter of 2009.
If you are a gambler, the analogy is sitting at the blackjack table down $1,000. If you have a good run and win $200, you are still well under water.