Gracia Martore, chief financial officer with Gannett Co. (GCI), said Wednesday the newspaper publisher sees encouraging signs of stabilization in ad markets, but she stopped short of predicting that the downturn has bottomed out.

"We're seeing more bright spots now than we were seeing in recent months on the advertising front," said Martore on a conference call with analysts following the company's second-quarter earnings release. "We'll leave it to others to call a bottom for the ad market."

Martore noted that "demand seems to be firming up a bit in some categories and in some geographic locations," but she said economic conditions can vary widely by region across the country.

Gannett's second-quarter ad revenue declined 32% at its publishing division, marking an improvement from the 34% decline it recorded in its first quarter, and the company's executives said June was its strongest advertising month so far this year.

Robert Dickey, president of Gannett's U.S. Community Publishing segment, said he has a more positive outlook for the second half the year. He noted that just in the last few weeks, local advertisers have shown a new willingness to commit to deals.

"Retailers are willing to negotiate contracts," said Dickey, noting that the company has recently signed annual ad contracts with retailers as well as shorter-term commitments.

-By Nat Worden, Dow Jones Newswires; (212) 416-2472; nat.worden@dowjones.com