Gannett Co. Inc., a large newspaper publishing company, reported yesterday a 20 percent increase in profits during 1978.

Earnings were a record $83.1 million ($3.10 a share) compared with $69.4 million ($2.60) in 1977 as revenues rose 24 percent to $690 million.

In the fourth quarter, the Rochester, N.Y., firm said profits rose 18 percent to $26.1 million (97 cents a share) from $22.2 million (83 cents) and revenues gained 28 percent to $203 million.

Chairman Allen Neuharth said advertising lines in Gannett papers increased 11 percent in 1978, while Sunday circulation rose 4 percent and daily circulation increased slightly. Gannett owns more than 75 dailies with a daily circulation in excess of 3 million.

A proposed merger of Gannett and Combined Communications Corp., of Phoenix, will be the subject of special stockholders' meeting later this month. According to a joint proxy statement, the Federal Trade Commission and Justice Department have been probing the merger plans, but have done nothing to prevent or delay creation of one of the largest communications firms in U.S. history.

CCC owners are scheduled to meet Feb. 16 in Phoenix and Gannett stock-holders will meet the next day in Rochester.