IPG's Q2 Revenue, Income Improve

NEW YORK Interpublic Group today reported second-quarter net income of $121.5 million on revenue of $1.65 billion.Compared to the same quarter of 2006, net income nearly tripled and revenue rose almost 8 percent from last year's figure of $1.53 billion.The No. 3 holding company attributed the growth partly to the realization of revenue from early 2007 wins, such as General Motors' Saturn, which landed at Deutsch/LA. IPG also reported a tax benefit of $11 million for the quarter.Conversely, major losses that occurred between April and June, such as Johnson & Johnson creative business at McCann Erickson and General Motors creative at McCann (Buick) and Lowe (GMC), won't impact revenue or severance costs until the third quarter at the earliest. IPG faces an additional challenge to turning a profit in the third and fourth quarters as a result.For the first half of the year, IPG recorded a net loss of $2.7 million, a significant improvement from 2006's first-half loss of $128.3 million. First-half revenue totaled $3.01 billion, up 5 percent from $2.85 billion in 2006.The company's second-quarter operating margin was 8.8 percent, up from 5 percent in the same period last year. IPG also reported margin improvement for the first six months, from -2.9 percent in 2006 to 0.7 percent in 2007. Still, that's a far cry from the double-digit margin goal that Roth has set for 2008. IPG CEO Michael Roth, during a 45-minute conference call with industry analysts, acknowledged that his margin target was "aggressive," particularly considering the "speed at which the digital component of the business is evolving and the rapidly accelerating need to embed these skill sets into every one of our agencies. This requires increased levels of investment in professional development and technology." He added that to "remain competitive in this regard, we may be called upon to make decisions that ensure our long-term growth but affect our ability to achieve the full measure of our aggressive margin targets within the timetable we have set." Roth, however, stopped short of adjusting his turnaround goals or timetable. "We continue to drive the organization toward achieving the 2008 targets," said Roth. "However, in spite of our strong performance this quarter, the client shifts and losses we've discussed today coupled with the dynamic change in our industry represent additional challenges that we must overcome."Organically, revenue grew nearly 7 percent for the quarter and 4 percent for the first half, compared to -3.7 percent and 0.5 percent, respectively, in the same periods last year, according to IPG.

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IPG's Q2 Revenue, Income Improve

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