UPDATE 1-Journal Communications Q2 adj profit tops market

* Q2 EPS $0.07 excl items vs est $0.03

* Q2 rev $109.4 mln trails Wall Street

* Reduces debt by $22 mln

* Sees Q3 publishing, television, radio revenue to be down

* Shares rise as much as 42 percent

July 21 (Reuters) - Diversified media company Journal Communications Inc (JRN.N), which publishes the Milwaukee Journal Sentinel, posted a better-than-expected quarterly profit before items and said it reduced debt by $22 million, sending shares up as much as 42 percent.

The company, which brought down its total debt to $178 million, said it has trimmed debt by $37 million in the first two quarters of 2009.

For the third quarter, the company expects its publishing, television and radio revenues to be down from year-ago period, reflecting continued challenges across its businesses.

"Our long time customers in automotive, real estate and retail advertising continue to feel the effects of the economic recession," said Chief Executive Steven Smith. In the second quarter, automotive advertising was down 49 percent in broadcasting and 56 percent in the daily newspaper, Smith said, adding that, "we have yet to see signs of a sustained recovery."

For the latest second quarter, Journal Communications posted a profit before items of 7 cents per share, well ahead of market estimates of 3 cents.

Including non-cash impairment charge and the gain related to a tower replacement, the company lost $4.8 million, or 11 cents a share, compared with earnings of $9 million, or 16 cents a share, a year ago.

Revenue fell about 22 percent to $109.4 million.

Shares of the company were up 24 percent at $1.35 in late morning trade on the New York Stock Exchange. They touched a high of $1.55 in early trade.

For related alerts, double click [ID:nWNAB9257] (Reporting by Deepti Govind in Bangalore; Editing by Gopakumar Warrier)