BOSTON Interpublic Group today reported a first-quarter loss of approximately $63 million, or 15 cents per share, on revenue of $1.5 billion.
The numbers represent an improvement over the company's performance in the same quarter a year ago, when IPG lost more than $125 million (or 29 cents per share) on revenue of $1.36 billion.
In organic terms, excluding acquisitions and fluctuations in currency, IPG's Q1 organic revenue improved more than 5 percent, the company said. (The actual revenue increase exceeded 9 percent.)
IPG also said it has set aside $12 million to cover the cost of a potential fine stemming from the Securities and Exchange Commission's long-running investigation of past accounting imbalances. The SEC launched the probe in 2002, after IPG reported a $181.3 million accounting imbalance due mainly to over-booking revenue at offices of McCann Erickson in Europe.
The loss was 1 cent narrower than a projection by analysts polled by Thompson Reuters.
Overall, the numbers represented IPG's best first-quarter performance in many years, said Frank Mergenthaler, the company's CFO, during a conference call with analysts and reporters today.
Michael Roth, IPG CEO, described Q1 as "a solid start to the year," noting the organic growth, additional spending from current clients and a new-business influx as positive signs.
International revenue, driven by new clients and increased ad spending in Asia and Europe, rose 15 percent, while U.S. revenue grew 5 percent.
Along with increased ad spending and new business, IPG said its cost-cutting efforts also helped its Q1 performance.
During the call, both Roth and Mergenthaler warned that especially in the current volatile economic climate, one quarterly improvement doesn't make the company's turnaround complete. Still, both said they were cautiously optimistic about IPG's performance moving forward and reiterated that the company is on target to meet its 8.5-9 percent margin goal for '08.
IPG's revenue performance for Q1 compared favorably to the numbers posted by its main competitors, all of which reported their numbers in the past week. Publicis Groupe yesterday said its organic growth was 5.4 percent, while WPP Group posted a 5 percent Q1 rise. Havas' Q1 spike was 7.4 percent. Omnicom Group, the largest agency firm, reported a 12.5 percent increase in actual revenue.
IPG agencies include DraftFCB, Lowe, McCann, Universal McCann, Deutsch, Mullen, The Martin Agency, R/GA and Hill, Holliday, Connors, Cosmopulos, among others.