Omnicom Group Inc. (
OMC
)
will report its first quarter 2012 earnings on Tuesday, April 17,
2012.
The current Zacks Consensus Estimate for earnings per share (
EPS
) is 69 cents, representing an annualized loss of 0.11%.
With respect to earnings surprises, over the trailing four
quarters, OMC outperformed the Zacks Consensus Estimate in all the
quarters. The average earnings surprise was 6.30%, implying that
the company outperformed the Zacks Consensus Estimate by the same
magnitude over the last four quarters.
Fourth-Quarter and Fiscal 2011 Highlights
On February 14,
Omnicom Group Inc.
posted decent operating results for the fourth quarter and fiscal
2011.
Omnicom's net income in the quarter grew 10.3% year over year to
$271.9 million from $246.5 million in the fourth quarter of 2010.
Diluted earnings per share (
EPS
) increased by 15.7% from 83 cents in the year-ago quarter to 96
cents in the reported quarter. Earnings per share also beat the
Zacks Consensus Estimate by a penny.
For FY11, Omnicom's diluted earnings per share increased 23.3%
to $3.33 compared with diluted earnings per share of $2.70 in the
year-ago comparable period.
Total revenue was $3,852.9 million, up 7.4% year over year from
$3,586.8 million in the corresponding quarter of the previous year.
Revenue surpassed the Zacks Consensus Estimate of $3,804.0
million.
Domestic and International revenue rose 5.0% and 9.9% to reach
$1,928.7 million and $1,924.2 million, respectively.
For FY11, the company reported total revenue of $13,872.5
million, up 10.6% y/y.
Agreement of Estimate Revisions
In the last 30 days, three analysts increased the company's EPS
estimate for the first quarter of 2012 while two analysts decreased
the same for the quarter. Also, for fiscal 2012, three analysts
raised their estimate while two decreased the same. For fiscal
2013, two analysts raised their estimate in the last 30 days, while
2 lowered the same.
Magnitude of Estimate Revisions
Estimates, over the last 30 days, remained static at 69 cents
per share for the first quarter of 2012, representing a
year-over-year decline of 0.11%.
Earnings per share estimates for fiscal 2012 remained static at
$3.67 over the last 30 days. For fiscal 2013, the average remained
static at $4.09 per share. These estimates represented a
year-over-year growth of 10.27% for 2012 and 11.33% for 2013.
Our Take
We remain cautious on the stock based on the intense pricing
pressures worldwide and client spending cuts.. Increased
acquisition expenses also pose a risk for Omnicom. However, we are
likely to see controlled expenses, which may encourage margin
consistency compared to its peers, such as
The Interpublic Group of Companies Inc.
(
IPG
),
Publicis Groupe SA
(
PUBGY
) and
WPP plc
(
WPPGY
).
We currently maintain a long-term 'Neutral' recommendation on
the stock. Also, Omnicom carries a Zacks #3 Rank, which translates
into a short-term (1-3 months) 'Hold' rating.
INTERPUBLIC GRP (
IPG
): Free Stock Analysis Report
OMNICOM GRP (
OMC
): Free Stock Analysis Report
PUBLICIS GP-ADR (
PUBGY
): Free Stock Analysis Report
WPP PLC (
WPPGY
): Free Stock Analysis Report
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