Interpublic Narrows Quarterly Loss

Interpublic Group today said its first-quarter net loss narrowed to $71.5 million (or 15 cents per share) from $73.9 million (or 16 cents per share) in the same period a year ago.
 
Revenue for quarter was $1.34 billion, up 1 percent from $1.33 billion a year ago. In organic terms, excluding the impact of currency fluctuations and acquisitions, revenue declined nearly 3 percent.

By way of comparison, the company suffered a 5.6 percent organic revenue dip in first-quarter 2009. For the fourth quarter, organic revenue declined 8 percent.
 
In a statement, CEO Michael Roth said the company was “pleased to see another quarter of significant sequential improvement in our organic revenue performance, which supports our belief that the economy is recovering and that we’ll keep seeing progress in our business.”
 
During an hour-long conference call with industry analysts, Roth added that the first-quarter results were “better than we expected coming into the year.”

“The improved tone of the business that we shared with you on our last call [in February] has begun to translate into revenue improvement in a number of markets and industry sectors,” the CEO said.

Despite the overall decline in organic revenue, two regions generated organic growth: the U.S., which was up 3 percent, and Latin America, up 10 percent. In contrast, organic revenue slid nearly 18 percent in the U.K and about 16 percent in continental Europe. The organic revenue decline in the Asia-Pacific region exceeded 6 percent.

By client sectors, IPG noted first-quarter revenue upticks in the automotive, retail, financial services, food/beverage and packaged-goods categories. IPG saw a significant decline in revenue from technology and telecommunications clients, however, as Microsoft and Verizon shifted business out of McCann Erickson.

The company’s severance expenses in the first quarter were $10.3 million, down notably from $41.6 million a year ago. Overall, salaries and related expenses were $979.3 million in the first quarter, down 1.7 percent from the year-ago period.

During the call, Roth reiterated that for the full year IPG should be able to achieve flat to slightly positive organic growth and an operating margin of at least 8 percent.

Several of IPG’s peers last week reported improved first-quarter financials, a sign, perhaps, that the ad business has begun a turnaround.

See also:

“IPG Execs’ Pay Revealed”

“Publicis Sees 3.1% Revenue Spike”

“Q1 Revenue Flat, Income Up at Omnicom”