FAIRPORT — GateHouse Media, Inc. a Fairport–based media company that owns The Observer-Dispatch in Utica, reported a bigger loss and lower revenue in the third quarter.

Total revenue declined 3.4 percent to $120.8 million, down from $125 million a year ago, even though the company grew its digital revenue by 27.9 percent.

The company posted a net loss of $9.4 million, or 16 cents per share, for the quarter, compared with a net loss of $6.2 million, or 9 cents per share, in the third quarter of 2011.

For the first nine months of 2012, GateHouse lost $25.7 million on revenue of $365.4 million versus a net loss of $28.4 million on revenue of $375 million a year ago.

“We continue to make inroads on our transformational strategy,” GateHouse CEO Michael E. Reed said in a news release. “While the anemic economic recovery creates a challenging operating environment, we continue to invest in our digital and other strategic growth initiatives, grow consumer revenues, reduce overall expenses, and implement new initiatives to stabilize print advertising.”

During the quarter, GateHouse invested $1.5 million in new strategic-growth initiatives focusing heavily on local digital solution services to small- and medium-sized businesses, Reed said.

Advertising revenue at GateHouse dropped from $86 million in the third quarter of 2011 to $80.1 million this year, while circulation revenue grew slightly from $32.8 million to $33.8 million, and commercial printing revenue grew from $6.4 million to $6.7 million.

Reed attributes the circulation revenue growth to pricing initiatives that helped offset volume declines. Sunday circulation saw improving volume trends throughout the quarter, he said.

GateHouse cut operating costs and expenses 2.1 percent to $102.3 million for the quarter. The cost savings came primarily from lower compensation.

“I believe we are developing the right strategies and making the right investments in people and resources to execute our transformational strategy, making GateHouse a truly local multimedia company,” Reed said. “These investments, along with a more efficient operating structure, should position us to take full advantage of the growth opportunities we see as well as improvement we should start to see coinciding with a sustainable improvement in the economy.”

GateHouse Media (www.gatehousemedia.com) publishes 78 daily publications and serves local audiences in 21 states with community publications and local websites. The company’s stock currently trades on the pink sheets for about 5 cents per share. Locally, GateHouse owns The Observer-Dispatch in Utica, The Evening Telegram in Herkimer, and The Evening Times in Little Falls.