IPG Reports ‘Unanticipated Charges’, Revenue Decline For Q3

NEW YORK — Interpublic Group on Wednesday reported worldwide revenue of $1.5 billion in the third quarter of 2002, down from previous forecasts. The company attributed the lower than expected results to “unanticipated charges” at McCann-Erickson.

Those charges stem from an accounting imbalance among McCann offices in Europe. In August, IPG estimated that the imbalance would be $68.5 million. Last month, the company said the figure would not exceed $120 million. Now, IPG says the “final amount” is $181.3 million.

Earnings per share for the quarter were 2 cents–down considerably from IPG’s previous estimate of 8-10 cents. As with the revenue decline, IPG attributed the lower than expected earnings to the size of the accounting imbalance.

In addition, the company revealed that it is searching for a chief operating officer, one of the titles CEO John Dooner held before taking the top post in December 2000. IPG also is poised to hire a new CFO at McCann-Erickson WorldGroup. Sal LaGreca left that position last month.

IPG declined to provide more detailed figures for the quarter, noting that it needed more time to “finalize the impact of the restatement on previously issued quarterly and annual financial statements.” The company now plans to provide a detailed analysis on Tuesday.

Industry analysts had expected such details during a 5 p.m. conference call. But after talking about the topline figures, Dooner and CFO Sean Orr ended the call without taking questions. The call took a mere 10 minutes.

IPG’s share price, which declined nearly 3 percent during market hours, fell substantially in early after-hours trading. At 6:00 p.m., the stock was trading at about $11.79, down 79 cents or about 6 percent from its Wednesday close. The stock?s bove its 52-week low of $9.85.