The Interpublic Group of Companies
) reported third-quarter 2013 net income of $45.4 million or 11
cents per share versus net income of $68.7 million or 15 cents
per share in the year-ago quarter.
The company's quarterly earnings suffered due to pre-tax
charge of $45.2 million related to early redemption of its 10.00%
Senior Notes due 2017. The company reported adjusted net income
of $76.6 million or 17 cents per share, missing the Zacks
Consensus Estimate by a penny.
Revenues increased 1.8% year over year to $1,700.4 million in
the reported quarter. The quarterly revenues missed the Zacks
Consensus Estimate of $1,711 million.
Organic revenues increased 2.8% year over year in the reported
quarter, while the inorganic revenues were up 0.4%. However,
foreign currency translations had a negative impact of 1.4%.
Operating income in the reported quarter was $141.5 million
versus $131.4 million in the year-ago quarter. Operating margin
in the quarter rose 40 basis points (bps) to 8.3% and operating
expenses fell 1.3% to $1,558.9 million compared to the
As of Sep 30, 2013, the company's cash and cash equivalents
and marketable securities totaled $1 billion, compared with $2.59
billion as of Dec 31, 2012. Total debt at quarter-end aggregated
$1.67 billion, down from $2.45 billion at year-end 2012
During the reported quarter, the company redeemed $600 million
of its 10.0% senior notes due 2017.
Share Repurchase Program/ Dividend
During third-quarter 2013, the company repurchased 6.2 million
shares for $100.2 million, bringing its tally for first nine
months of the year to 19.9 million shares for an aggregate cost
of $280.8 million. Dividends paid during the quarter aggregated
7.5 cents per share, totaling $31.4 million.
Interpublic aims to boost top-line performance with a
consistent focus on organic and inorganic growth. It also aims to
return significant cash to shareholders through share repurchases
and dividend payouts. Moreover, its commitment toward controlling
costs is likely to drive further growth in the coming
years. The company reaffirms its organic revenue growth
target of 2%-3%, with margin improvement of 50 bps in 2013.
Specialist and digital capabilities across Interpublic's
portfolio are expected to be strong, given the company's growing
presence in high-growth emerging markets at all major
Interpublic currently carries a Zacks Rank #3 (Hold). Some
better-placed stocks in the same industry worth considering
Clear Channel Outdoor Holdings Inc
Huron Consulting Group Inc.
). While Clear Channel and WPP both carry a Zacks Rank #2 (Buy),
Huron Consulting has a Zacks Rank #1 (Strong Buy).
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