True North Communications Inc. posted a 38% gain in first-quarter net income, exceeding Wall Street estimates, helped by strength in the company's international markets.
The advertising concern, which agreed earlier this year to be acquired by Interpublic Group of Cos., on Tuesday said net income rose to $9.7 million, or 19 cents a diluted share, from $7 million, or 14 cents a share, a year earlier.
The latest results included a pretax merger-related charge of $1.6 million and gains totaling $900,000. Excluding these items, the company said it would have earned $10 million, or 19 cents a share -- two cents better than the mean estimate of analysts surveyed by Thomson Financial/First Call.
Revenue increased 7.6% to $356.1 million from $331.1 million.
The company credited strong performances in its global agency brands -- FCB Worldwide, Marketing Drive in marketing services, and BSMG Worldwide in public relations.
Interpublic (IPG), the corporate parent to McCann-Erickson WorldGroup and Lowe Group, agreed to acquire True North (TNO), the parent of Foote Cone & Belding and the Bozell Group, in a stock deal valued at about
$2.1 billion at the time it was announced in mid-March. The deal would make New York-based Interpublic the world's largest advertising company by revenue and a powerhouse in media services. The combined company would have revenue of $7.2 billion, based on reported 2000 results.
The deal includes an $80 million breakup fee, according to filings made with the Securities and Exchange Commission. Either party may terminate the pact if it isn't completed by about Sept. 14. However, the walk-away date may be extended by 90 days if either company needs additional time to obtain regulatory approvals.
Copyright (c) 2001 Dow Jones & Company, Inc.