Earnings in Focus: IPG Posts 4Q Loss; Publicis ’03 Strong

Despite an increase in revenue, Interpublic Group last week reported a loss of $102 million in the fourth quarter, or 26 cents a share, as the holding company continued its restructuring efforts.

That loss compares with a profit of $20.3 million, or 5 cents a share, in the year-earlier period. Revenue, aided by exchange rates, rose 5.7 percent to $1.6 billion. International revenue surged 18 percent to $768.4 million. U.S. revenue slumped 3.4 percent to $861 million. On a constant currency basis, revenue increased less than 1 percent.

The company said the results reflected charges associated with its restructuring and some poor international investments in which IPG owns minority stakes. In a conference call to investors last Tuesday, CEO David Bell cautioned that the company was just “six months into a 24- to 36-month turnaround plan.”

Bell also cited difficulties at operating units, describing Lowe & Partners Worldwide as going through a “difficult patch” and FCB Group struggling “to maintain margins.” For all of 2003, IPG posted a loss of $451.7 million on a 2.2 percent gain in revenue of $5.9 billion.

Last week, Publicis Groupe also reported results, posting a 2 percent rise in 2003 net income to $194 million, thanks to strong new-business growth and the completion of integrating Bcom3 into the Paris-based company. Revenue rose 32 percent to $5.3 billion.