By Mike Elliott

LONDON (Reuters) - Newspaper publisher Trinity Mirror (TNI.L: Quote, Profile, Research) warned full-year operating profit would be about 10 percent below expectations as advertising market conditions deteriorate, sending its shares sliding.

The publisher of the Daily Mirror newspaper also said that it was cancelling the remainder of its share buyback programme and would look at the appropriate level of its annual dividend when it has better visibility of trading conditions.

Shares in Trinity Mirror, which have underperformed the UK media index by around 57 percent in the past 12 months, were down 24.4 percent to 115.25 pence by 8:58 a.m. on Monday,. valuing the group at 297 million pounds.

"We would expect double digit cuts to EPS given ongoing weak trading expected for H2 and the cancellation of the buyback," Cazenove analysts said in a note, cutting their rating on the stock to "underperform" from "in-line".

"While the stock has already fallen a long way, and valuation should remain undemanding even on lower estimates, we see scope for further falls given the removal of the buyback underpinning and the need (in our view) for a more aggressive digital investment strategy," they added.

The company said that since its trading update in early May, "advertising market conditions have deteriorated reflecting the uncertain outlook for the UK economy with the ongoing adverse implications of inflationary cost pressures and the wider implications of the credit crunch."

Trinity Mirror, which owns around 200 national and regional newspaper titles, said it had seen a marked year-on-year decline in advertising revenues in May and June, and this was expected to continue for the rest of the year.

Underlying group revenue fell by 7.8 percent in the nine weeks to June 29, or by 4.5 percent in the 26 weeks to June 29. Underlying advertising revenue fell by 12.6 percent in the nine-week period and by 7.2 percent for the 26 weeks.