NEW YORK (Reuters) - Standard & Poor's (S&P) yesterday placed The New York Times Co.'s rating on review for a possible upgrade, citing an improving environment for newspaper revenue.

The agency rates the newspaper at B, or five notches into "junk" status.

The action "reflects our view that The New York Times may be able to achieve and sustain credit measures and a liquidity profile appropriate for a higher rating", S&P said in a note.

The newspaper publisher earlier reported better-than-expected quarterly earnings and revenue that was lower but by a smaller percent than in the fourth quarter.

Advertising revenue fell six percent in the first quarter after a 15 percent decline in the fourth quarter and declines of close to 30 percent in the first three quarters of 2009.

Total revenue was down three percent after a 12 percent drop in the fourth quarter.