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Interpublic (IPG) Surpasses Q2 Earnings & Revenue Estimates

The Interpublic Group of Companies, Inc. IPG reported better-than-expected second-quarter 2020 results.

Adjusted earnings of 23 cents per share beat the Zacks Consensus Estimate by 15% but declined 50% on a year-over-year basis.

Net revenues of $1.85 billion beat the consensus estimate by 6.3% but decreased on a year-over-year basis due to organic net revenue decrease of 9.9%, negative impact of 2.1% due to foreign currency movement and 0.8% due to dispositions. Total revenues of $2.03 billion declined 19.6% year over year.  

Interpublic Group of Companies, Inc. The Revenue (TTM)

 

Interpublic Group of Companies, Inc. The Revenue (TTM)

Interpublic Group of Companies, Inc. The revenue-ttm | Interpublic Group of Companies, Inc. The Quote

So far this year, shares of Interpublic have lost 20.3% compared with 37% decline of the industry it belongs to and 0.8% increase of the Zacks S&P 500 composite.

 

 

Let’s check out the numbers in detail.

Operating Results

Operating income in second-quarter 2020 came in at $40.5 million compared with $264.2 million in the prior-year quarter. Operating margin on net revenues decreased to 2.2% from 12.4% in the year-ago quarter. Operating margin on total revenues fell to 1.9% from 10.5% in the year-ago quarter.

Adjusted EBITA came in at $62.3 million, compared with $285.5 million at the end of the prior-year quarter. Adjusted EBITA margin on net revenues declined to 3.4% from 13.4% in the year-ago quarter. Adjusted EBITA margin on total revenues fell to 3.1% from 11.3% in the year-ago quarter.

Total operating expenses of $2.28 billion declined 1.2% year over year.

Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise

Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise

Interpublic Group of Companies, Inc. The price-consensus-eps-surprise-chart | Interpublic Group of Companies, Inc. The Quote

Balance Sheet

As of Jun 30, 2020, Interpublic had cash and cash equivalents of $1.09 billion, compared with $1.55 billion at the end of the prior quarter. Total debt was $3.97 billion compared with $4.22 billion at the end of the prior quarter.

Dividend Payout

During the reported quarter, the company declared and paid out a cash dividend of 25.5 cents per share, amounting to $99.2 million.

Currently, Interpublic carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half RHI reported second-quarter 2020 earnings of 41 cents per share, which beat the consensus mark by 17% but were down 58% year over year.

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