Stockholder expecting good news in earnings report

Ariel Investments LLC, Lee's largest stockholder, believes newspapers will beat analyst estimates for the next year and a half as the advertising decline levels off and moves to cut expenses pay off.

“With all the cost cutting, you just have to have some reasonable growth in revenue and you’ll have spectacular earnings growth,” said John Rogers Jr., chief executive officer of Chicago-based Ariel Investments LLC, which is also McClatchy Co.’s second-biggest holder. “This economy is going to recover and people are going to advertise again.”

Of course, some of that cost cutting has been layoffs.

As of June 30, Ariel had 4.44 million shares of Lee stock, or 11 percent. Ariel is also Gannett's largest stockholder (28.5 million shares, or 12 percent).

Lee will release its third quarter earnings on Thursday.