NEW YORK (Reuters) — A sharp drop in classified advertising sales brought on by free internet listings and a cooling real estate market helped push US newspaper publishers’ financial results lower in the first quarter.Gannett Co. Inc., New York Times Co. and Journal Register Co. reported drops in revenue and profit yesterday, while Tribune Co. and Media GeneralInc. both swung to losses from a year earlier.

“The theme here is severe, almost unprecedented declines in classified advertising, particularly real estate and auto,” Benchmark Co. analyst Ed Atorino said.

The Times, Tribune and Media General posted results that beat analyst forecasts, according to Reuters Estimates, while Gannett and Journal Register narrowly missed expectations.

Newspaper shares fell in yesterday’s trading, with the Times taking the biggest drop at more than 2.5 percent.

Classified sales were hurt by tough economic conditions in some regions, as well as slowing home sales and winter storms, publishers said. But beyond that, the industry is still reeling from web-sites such as Craigslist.org that offer free classifieds.

Newspapers are making deals with the likes of Yahoo Inc. and Google Inc. to expand their web advertising reach, and online sales are rising as a result. But that only accounts for 10 percent or less of total revenue.

“I don’t think this is some kind of death knell,” Atorino said. “The numbers were in line with some of the low expectations.”

Online operations improved for most publishers. But the Times pulled back from its digital revenue growth forecast of 30 percent for 2007, citing a slower rise in ad sales.

The news comes as some Times shareholders try to get the company to eliminate a dual-class share structure that allows the Ochs-Sulzberger family to control the company’s direction.

Gannett cited severe winter storms in parts of the United States for curtailing ad spending during the quarter as well as a weak real estate market.

“The housing cycle, and it is a cycle, will also pass, though we can’t predict when,” chief financial officer Gracia Martore told analysts on a conference call. “But when it does, we will be well positioned to capitalise on those better revenue results.”

Net income fell to $210.6 million, or 90 cents a share, from $235.3 million, or 99 cents a share, last year. Revenue fell to $1.87 billion from $1.88 billion a year ago.

Pro forma ad revenue at Gannett’s US newspapers fell 4.8 percent, while at USA Today it fell 7.9 percent.