UPDATE 2-Journal Communications Q3 profit in line, sees weak Q4

* Q3 adj. EPS $0.08 vs est $0.08

* Q3 rev $105.1 mln vs est $108.1 mln

* Shares down as much as 25 pct (Adds conference call detals, analyst comments)

BANGALORE, Oct 20 (Reuters) - Diversified media company Journal Communications Inc (JRN.N) posted a third-quarter profit in line with the market but said it continued to see challenges across its businesses, sending its shares down as much as 25 percent.

For the fourth quarter, the publisher of the Milwaukee Journal Sentinel expects its publishing, television and radio revenue to be down compared with the prior period.

Journal Communications, however, expects to see a sequential improvement in revenue in the fourth quarter.

"We are looking ahead to next year when we hope we will see improved business conditions for our customers, a recovery in the ad spend in our core markets, as well as the lift that additional political and Olympics spending will provide," Chief Executive Steven Smith said on a conference call.

Third-quarter revenue declined 23 percent to $105.1 million. Analysts had expected $108.1 million, according to Thomson Reuters I/B/E/S.

The company experienced a dive in revenue across all segments in the quarter. Publishing revenue decreased 21.8 percent while revenue from broadcasting services fell 21.4 percent to $42.4 million.

"While the current economic environment has significantly pressured margins, we believe the actions the company is taking on the cost side will improve the profitability profile when the advertising market improves," Robert W. Baird analyst Daniel Leben said in a note to clients.

The analyst has a "neutral" rating on the company's stock.

For the quarter, Journal Communications earned 2 cents a share. Excluding a charge for workforce reductions and certain other items, it earned 8 cents a share.

Analysts on average expected earnings of 8 cents a share, excluding items.

Shares of the Milwaukee-based company were down 6 percent at $4.27 Tuesday afternoon on the New York Stock Exchange. They had earlier touched a low of $3.42. (Reporting by Sudipto Ganguly in Bangalore; Editing by Unnikrishnan Nair)