Omnicom Group Inc.
) reported strong fourth quarter 2012 results with a net income
of $307.1 million or $1.13 per share compared to $271.9 million
or 96 cents in the year-earlier quarter. The earnings for the
reported quarter exceeded the Zacks Consensus Estimate by 4
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For full year 2012, the company reported a net income of $998.3
million or $3.61 per share compared to $952.6 million or $3.33 in
the previous year. The earnings for 2012 surpassed the Zacks
Consensus Estimate by 3 cents.
Total revenues in the reported quarter climbed 2.4% to settle at
$3,944.5 million and beat the Zacks Consensus Estimate of $3,933
million. From a geographical perspective, domestic revenue
accounted for 51.4% of total revenue and rose 5.1% to reach
$2,026.6 million, while international revenue (representing the
balance 48.6%) dipped 0.3% year over year to $1,917.9 million.
Based on disciplines, Advertising revenue grew 4.6% to $1,934.9
million in fourth quarter 2012; CRM revenue decreased 2.3% year
over year to $1,368.7 million; PR revenue of $347.9 million was
up 10.5% year over year; and Specialty revenue of $293.0 million
was up 2.0%.
For full year 2012, total revenues were 14,219.4 million,
representing a 2.5% year-over-year increase. Domestic revenue for
the year increased 4.5% to $7,363.7 million, while international
revenue increased 0.5% to $6,855.7 million.
On the basis of disciplines, Advertising revenue grew 4.6% to
$6,762.8 million in 2012; CRM revenue rose marginally to $5,122.5
million; PR revenue surged 4.9% to $1,290.8 million; and
Specialty revenue of $1,043.3 million was down 2.1% year over
Omnicom generated free cash flow of $1,426.1 million in 2012, up
from $1,247.3 million in the preceding year. The company had a
total debt of $4,455 million at year-end 2012, compared to 3,193
million in the year-ago period. Cash and short-term investments
aggregated $2,699 million at year-end 2012 compared to $1,805
million in the prior year.
Omnicom has a strong track record of winning new clients and
receiving additional deals from the existing ones. The company's
business mix is well diversified geographically and benefits
largely from the growing markets. In addition, the company's
efforts in maintaining controlled expenses and strong global
reputation are commendable.
However, the company needs to be wary of stiff competition from
other players in the industry such as
AirMedia Group Inc.
Publicis Groupe SA
), each carrying a Zacks Rank #2 (Buy), and
), carrying a Zacks Rank #1 (Strong Buy). Omnicom presently has a
Zacks Rank #3 (Hold).