Omnicom's (OMC) Q1 Earnings Beat Estimates, Increase Y/Y

Omnicom Group Inc. OMC reported impressive first-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.

Earnings of $1.67 per share beat the consensus estimate by 9.9% and increased 7.1% year over year. Total revenues of $3.6 billion surpassed the consensus estimate by 1.6% and increased 5.4% year over year.

The increase in the top line was led by an increase of 4% in revenues from organic growth and a 1.5% increase in acquisition revenues, net of disposition revenues, mainly due to the Flywheel Digital acquisition in the Precision Marketing segment.

Omnicom shares have gained 22.3% over the past six months compared with 10.4% rise of the industry it belongs to and the 16.9% rally of the Zacks S&P 500 composite.

Omnicom Group Inc. Price, Consensus and EPS Surprise Omnicom Group Inc. Price, Consensus and EPS Surprise

Omnicom Group Inc. price-consensus-eps-surprise-chart | Omnicom Group Inc. Quote

Organic Growth Across Disciplines and Regions

Across fundamental disciplines, revenues from Advertising & Media increased 7% compared with our estimated growth of 6.4%. Precision marketing revenues jumped 4.3% compared with our estimate of 3.1% growth. Experiential revenues improved 9.5% compared with our expectation of 4.7% growth.

Public Relations revenues decreased 1.1% compared with our estimation of a 0.6% decline. Healthcare revenues increased 2.1% organically, year over year, versus our estimated growth of 3.8%. Branding & Retail Commerce revenues were down 3.8% versus our estimated growth of 1.3%. Execution and support declined 4.3% versus our estimated decline of 1.1%.

Across regional markets, year-over-year organic revenue growth was 4.3% in the United States, 3.2% in the U.K., 3.5% in Euro Markets & Other Europe, 22.3% in Latin America, 3% in Asia Pacific and 1.1% in Other North America. Middle East & Africa revenues declined 4.2%.

Margin Performance

EBITA in the quarter came in at $500.4 million, up 38.5% year over year. EBITA margin was 13.8%, up 330 basis points (bps) year over year. Operating profit of $478.9 million increased 38.2% year over year. The operating margin increased 310 bps to 13.2%.

Zacks Rank and Other Stocks to Consider

Omnicom currently carries a Zacks Rank #2 (Buy).

A couple of other top-ranked stocks from the broader Zacks Business Services sector are Waste Connection WCN and Viad Corp VVI.

Waste Connection currently carries a Zacks Rank of 2. It has a long-term earnings growth expectation of 12.6%.WCN delivered a trailing four-quarter earnings surprise of 1.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Viad Corp presently carries a Zacks Rank of 2. It has a long-term earnings growth expectation of 15%. VVI delivered a trailing four-quarter earnings surprise of 8%, on average.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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