MDC Partners posted a 7.5 percent gain in organic revenue in the third quarter (factoring out currency fluctuations and the impact of acquisitions), but blamed flat net income on the timing of revenue recognition and higher costs associated with an increase in new-business pitches.
In the quarter, MDC said overall revenue increased nearly 33 percent to $178.6 million. (MDC now derives 45 percent of its revenue from business related to digital communications and technology, up from 43 percent in the second quarter.) The company posted net income of $20.4 million vs. $20.2 million in the year-earlier quarter.
During a call with investors, MDC chief executive Miles Nadal said the company is nevertheless on track to meet or exceed projected full-year profits of $86-88 million, which would amount to an increase of 23-25 percent over 2009.
In response to an analyst's question about the future of MDC flagship Crispin, Porter + Bogusky, Nadal made reference to the management changes revealed this week and said the agency would announce the hiring of a new global head of planning and account management, confirming a report in Adweek. He also said within the next three years the agency would expand into Asia and further increase its presence in Europe, where it has offices in Sweden and Spain. He added Crispin would "probably" also move into Latin
MDC is also working on an initiative to move Crispin's digital production and post-production business in-house, work that is currently outsourced. He estimated the agency could capture about 60 percent of the $50 million in client production work over the next three years.
Nadal said MDC pulled in nearly $15 million in net new business gains during the third quarter from marketers in industries like consumer packaged goods, automotive, travel and leisure, and healthcare. He said within the last 72 hours MDC companies have added five "significant" new pieces of business, but he declined to elaborate.
On the call Nadal said MDC has spent more than $25 million on new hires and brought in over 500 new employees.
Among MDC's rivals reporting quarterly results:
Publicis' Q3 Revenue Beats Expectations
6.7% Revenue Rise for Omnicom Group
Havas Sees 5.4% Gain in Q3