NEW YORK Interpublic Group today said it more than doubled its 2008 net income applicable to common shareholders to $265 million, up from $131 million the previous year.
The improvement was fueled by revenue growth of more than 6 percent. Between 2007 and 2008, the holding company's revenue rose from $6.55 billion to $6.96 billion, IPG said.
IPG also hit its previously stated operating margin goal of 8.5 to 9 percent for the year, achieving a margin of 8.5 percent. In addition, organic revenue grew at peer-levels, with a 3.8 percent year-to-year increase.
For the fourth quarter, organic revenue declined 2 percent compared to the like period in 2007 -- illustrating the falloff in business that the entire sector has experienced since late last year.
Gross revenue also declined in Q4, to $1.90 billion from $1.98 billion in the year-before period. Net income for the quarter applicable to common shareholders, however, grew from $162.7 million in 2007 to $209.8 million. (Click here for IPG's complete financials.)
"While meeting our 2008 financial objectives is gratifying, the latter part of the fourth quarter and the early part of 2009 have begun to show the negative effect that the broader economic situation is having on the marketing services sector," said IPG CEO Michael Roth, in a statement.
He continued: "Our long-standing conservative approach to financial and balance sheet management has us well-positioned for these volatile times. Given that it's unclear how pronounced or lasting the downturn will be, we must continue to remain focused on the basics: delivering value to our clients and ensuring that we continue to manage to our margins. These are the fundamentals that will allow us to come through this difficult period and ensure future growth."
During an hour-long conference call with industry analysts, Roth and CFO Frank Mergenthaler said IPG would focus on cost control in 2009, in hopes of maintaining its operating margin. That could translate into more layoffs and cutting spending on temporary labor, and incentives.
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