Reports occasional sightings of third fiend -- gosh! (7)
I believe the answer is:
tidings
'reports' is the definition.
(tidings means news or information)
'occasional sightings of third fiend gosh' is the wordplay.
'occasional sightings of' means one should take alternating letters (letters taken at regular intervals or occasionally).
'third'+'fiend'+'gosh'='thirdfiendgosh'
The alternate letters of 'thirdfiendgosh' are 'TIDINGS'.
(Other definitions for tidings that I've seen before include "Information about recent events" , "News (arch.)" , "News, information" , "News, reports" , "News (obs.)" .)