Lee Enterprises just completed its Q3 2009, and results are in. Debt was reduced by $18 million, cash operating expenses excluding unusual items were reduced 22 percent, but operating revenue declined 20.5 percent. Print and online advertising revenue decreased to $148 million, a reduction of 24.3 percent – but print wasn’t the bulk of the issue, as online ad sales fell 29.3 percent.

Classified revenue tanked – down 35.2 percent overall, with recruitment decreasing by more than 60 percent, real estate down 35 percent, and automotive declining nearly 31 percent.  Circulation revenue declined 6.3 percent – and while that may not seem surprising, some newspaper groups have realized gains in this area due in part to reduction in size of print products and in lowered newsprint costs. Lee blames its loss in part to elimination of less profitable delivery areas.

The Lee Enterprise audience is expanding, however – with print reach remaining steady at 61 percent, print and online penetration gaining two percent from 2008 to 68 percent, and unique online visitors increasing year over year to 40.2 million – a 5.4 percent gain.

“We are continuing to position Lee so it will emerge strong when the recession ends,” said Mary Junck, chair and CEO at Lee. “While overall business remains sluggish, it has stabilized, and many of our publishers are reporting cautious optimism from an increasing number of local advertisers. We are also encouraged by our efforts to expand our local advertising market share and the response we have received to new sales programs that reach non-traditional advertisers.”

Part of The Newspaper Consortium, Lee is soon to add Yahoo behavioral targeting to its HotJobs collaboration with Yahoo.