Interpublic Group of Companies Inc.
) reported disappointing third quarter 2012 (ended September 30,
2012) results. Earnings for the quarter were 15 cents per diluted
share, a decline of 62.5% from the 40 cents reported in the third
However, the earnings for the third quarter 2011 were 16 cents
excluding the effect of the Facebook transaction, which involved
the sale of almost half of IPG's holding in
The results were marginally short of the Zacks Consensus
Estimate of 17 cents.
Revenue dropped 3.2% year over year to $1,670.4 million from
$1,726.5 million in the third quarter 2011, with a 5.5% sales
decline in the U.S. Also, a 0.15% decline was registered
internationally. Revenue in the quarter missed the Zacks
Consensus Estimate of $1,709.0 million by 2.2%.
Organic revenue decreased 0.9% during the quarter, while
foreign currency translations had a negative impact of 3.1%.
These were partially offset by 0.8% contribution from
Operating income was recorded at $131.4 million, compared with
$173.2 million in the year-ago period. Operating expenses in the
quarter went down 0.9% to $1,539.0 million. This included a
decrease of 2.2% in salaries and related expenses and increase of
2.0% in office and general expenses. Operating margin in the
quarter was 7.9%, compared with 10.0% in the year-ago
Exiting the third quarter, the company's cash and cash
equivalents and marketable securities amounted to $1.20 billion,
compared with $1.51 billion in the previous quarter, a decline of
20.5%. Total debt was recorded at $1.68 billion, compared with
$1.63 billion in the preceding quarter.
Share Repurchase Program/Dividend:
During the third quarter of 2012, the company repurchased 7.6
million shares at an aggregate cost of $83.2 million and an
average price of $10.94 per share. Dividends paid during the
quarter amounted to $25.8 million, or roughly 6 cents per
The company is the third largest advertising company in the
world, offering a range of advertising and marketing
communication services. The company competes with other industry
players, such as
Omnicom Group Inc.
Publicis Groupe SA
We currently maintain a long-term Neutral recommendation on
the stock. The company holds a Zacks #3 Rank, which translates
into a short-term (1-3 months) Hold rating.
INTERPUBLIC GRP (IPG): Free Stock Analysis
OMNICOM GRP (OMC): Free Stock Analysis Report
PUBLICIS GP-ADR (PUBGY): Free Stock Analysis
WPP PLC (WPPGY): Free Stock Analysis Report
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