McClatchy, which owns The Miami Herald and Sacramento Bee, said its second-quarter net income rose to $42.2m compared to $19.7m last year, a rise of 43%.
The news sent its shares up by as much as 67%. It also said that it had reduced its debt in an offer to reassure investors. Analysts contacted by Reuters had been expecting McClatchy to make a loss.
Revenues, however, fell by 25.4% to $365.3m echoing the story from the rest of the industry.
Gary Pruitt, CEO of McClatchy, said: "There has been a steady drumbeat in recent media and analyst reports about the prospects of McClatchy violating bank covenants this year.
"Even if our advertising performance does not improve from its current run rate for the rest of the year, we would not breach our bank covenants."
McClatchy said that advertising revenue fell 30% in the second quarter, but crucially said that the level of decline was lesser month by month.
The rise in profits at McClatchy comes after it made deep cuts to its workforce cutting 1,600 employees earlier this year representing 15% of its workforce.
This chimes with what USA Today publisher Gannet said last week when it moved into a second-quarter profit after cost cutting although its operating results continued to weaken.
For the quarter, Gannett reported a profit of $70.5m on revenues down 18% to $1.41bn. In the second quarter of 2008, it posted a $2.29bn loss after asset write-downs.
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