Interpublic Group can thank its wise investment in Facebook for strong third quarter financial results. After selling half of its stake in the social network in August for $132 million, on Friday IPG reported a dramatic jump in its profit for the quarter, to just over $208 million.That's more than four times the $42.4 million profit the company reported during the same quarter last year.
For shareholders, this means earnings of 40 cents per shares compared to eight cents per share year over year. Excluding the gains from the Facebook deal, IPG shareholders earned 16 cents per share.
IPG’s quarterly revenue increased 11 percent to $1.73 billion, up from $1.55 billion this time last year. Overall, during the first nine months of 2011, IPG’s revenue reached $4.94 billion–up from $4.5 billion during the first nine months of last year.
On a conference call with analysts Friday morning, CEO Michael Roth reported that the company has seen strong business growth in the retail and financial services sector in particular, highlighting clients such as Mastercard and Bank of America. IPG did see weakness this quarter in the packaged goods sector, primarily resulting from the July loss of S.C. Johnson, which had been an IPG client for five decades.
Regarding new business, Roth told analysts that IPG star agency McCann is “in the finals of the Exxon pitch.” Roth confirmed that although IPG has won new business it is still “new business negative.” Pressed for specifics on new accounts, he was fairly tight lipped when it came to naming names. Though he mentioned that Deutsch won business from Microsoft, he didn’t refer to any further accounts. “When we lose business, its always out in the papers. When we win business, [clients] want to keep it quiet. I’d rather win the business and not announce it than not have it,” Roth said.