Omnicom: Maneuvers or Genuine Growth?

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Omnicom Group’s continuing revenue growth in the first quarter of 2003 must irk WPP Group boss Sir Martin Sorrell. While revenue was up 12 percent at Omnicom, at WPP it was down by 3.9 percent. Admittedly, WPP suffered more than Omnicom from currency movements—on a constant currency basis, WPP’s revenue was up 1.4 percent—but currency movements are a real part of commercial life and cannot be ignored. They hit shareholders’ earnings in the same way as any other component of the income statement.

Nevertheless, a comparison of the reported results of Omnicom and WPP for last year raises some questions about the extent to which Omnicom’s reported profits have been boosted by financial maneuvers as much as by down-to-earth performance.

Take a look at the impact of interest charges.



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