Placing the blame squarely on the global economic downturn, Interpublic Group today said it suffered a 38 percent Q4 drop in net income to $129.4 million on an 8.2 percent organic revenue decrease to $1.8 billion, compared to the same quarter in 2008.
Organic revenue excludes fluctuations in exchange rates, the impact of acquisitions and other factors.
The performance beat analysts’ expectations, as the average revenue projection for IPG’s Q4 was about $1.74 billion, per Thomson Reuters.
For full-year 2009, the holding company’s revenue fell 10.8 percent in organic terms to $6.03 billion compared to the previous 12-month period.
IPG’s revenue places it about $300 million behind rival Publicis Groupe, which now moves up to third among the global holding companies. WPP and Omnicom rank first and second, respectively.
Full-year net income at IPG was $93.6 million, way down from the $265 million the firm tallied in ’08.
During an hour-long conference call with analysts today, IPG CEO Michael Roth characterized the tone of the business as one of “tempered optimism.”
Roth said, “We think that the worst of the recession’s impact on our business [has passed]. Economic conditions appear to have stabilized, and we believe we should see improvement during the course of 2010.”
He added, however, “It’s likely that progress won’t be linear.”
Later in the call, Roth said IPG hopes to achieve an operating margin of 8 percent in 2010 and can do that even with flat organic growth.
IPG’s peers in the global marketplace also suffered through rough fiscal years in ’09, though some slowing in the downward spiral for Q4 has been interpreted as a sign that an ad recovery may be ready to begin.
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