Wednesday, advertising and marketing services provider Interpublic Group of Companies Inc. (IPG) reported a sharp decline in third quarter earnings reflecting an 18% year-on-year decrease in revenue as advertisement industry experiences an intense recession. However, the company's earnings came in ahead of Street view.
New York-based Interpublic's third quarter net income available to IPG common stockholders plunged to $17.2 million or $0.03 per share from $38.7 million or $0.08 per share a year ago. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.01 per share. Analysts' estimates typically exclude the special items.
Quarterly revenue slipped 18% to $1.427 billion from $1.74 billion in the comparable quarter last year, yet came in line with Street estimate of $1.42 billion.
Commenting on the results, Michael Roth, Interpublic's Chairman and Chief Executive Officer said, "During the quarter, the economic downturn continued to weigh on our results."
Roth added "Client sentiment has stabilized, but remains cautious, which makes it difficult to predict what growth will look like in 2010."
Interpublic noted that for the quarter the effect of foreign currency translation was negative 3.9%, the impact of net acquisitions was positive 0.1% and the resulting organic decrease in revenue was 14.2%.
For the quarter, United States operations netted revenues of $834.1 million, down 13.5% from $963.8 million a year ago, while International operations generated revenues of $592.6 million, a decline of $23.7% from $776.2 million last year.
Year-to-date, Interpublic posted a net loss available to IPG common stockholders of $35.8 million or $0.08 per share, compared to net income of $56.7 million or $0.12 per share in the corresponding period last year. For the nine-month period, Interpublic generated revenues of $4.226 billion, down 16.5% compared to $5.061 billion in the previous year.
IPG is trading at $6.41, up $0.30 or 4.91%, on a volume of about 2.15 million shares.
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