Nov. 10 (Bloomberg) -- Agora SA said third-quarter profit fell less than expected after cuts in wages and marketing costs helped Poland’s largest publisher cope with an advertising- market slump that pushed down sales.

Net income dropped to 10.1 million zloty ($3.6 million) from 13.9 million zloty a year earlier, the Warsaw-based company said in a regulatory statement today. That compares with the 3.3 million-zloty estimate of 5 analysts surveyed by Bloomberg.

“This is a very good result and it was achieved in a quarter that is seasonally weaker,” Waldemar Stachowiak, an analyst at Ipopema Securities SA in Warsaw, said by phone today. “The decline of the revenue was almost totally compensated for by falling personal and marketing costs.”

Agora’s shares rose 2.6 percent to 19.5 zloty at 9:43 a.m. in Warsaw today. The WIG20 Index rose 0.3 percent.

The publisher of the Gazeta Wyborcza newspaper, which gets two-thirds of its revenue from advertising sales, said Poland’s ad market shrank 15 percent in the third quarter from a year earlier as an economic slowdown cut marketing budgets.

Agora’s sales fell 13 percent to 246.8 million zloty, compared with an estimate of 247.5 million zloty. Agora sees no “significant elements of improvement” on the ad market in the fourth quarter, it said in the statement.

“The company promises that more effects of restructuring will be visible in 2010, but without improvement on the ad market its effects will have diminishing impact on profit improvement,” Andrzej Szymanski, an analyst at Bank Zachodni WBK SA in Warsaw, wrote in a note today.

Wages, Marketing Costs

The company cut wage costs by 17 percent to 61.6 million zloty and marketing costs by 29 percent to 30.6 million zloty.

Revenue from Wyborcza, Agora’s flagship product, which has 38 percent of Poland’s newspaper ad market, fell 20 percent to 115.1 million zloty. A 10 percent decline in copy sales was cushioned by a price increase, while advertising sales fell 27 percent, more than the 23 percent decline on the daily newspaper market.

According to Agora, the Internet was the only growing segment of the ad market, gaining 1 percent from a year earlier. The publisher, which also operates an outdoor advertising company and runs radio stations, gets 8.1 percent of its sales from the Web.

To contact the reporter on this story: Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net

Last Updated: November 10, 2009 03:45 EST