IPG Posts $8.6 Million Loss

NEW YORK The Interpublic Group on Thursday posted a first-quarter loss of $8.6 million, or 2 cents a share, compared to earnings of $59.8 million or 16 cents a share in the year earlier quarter, ended March 31.

First-quarter revenue rose nearly 1 percent to $1.43 billion, boosted by higher foreign exchange rates relative to the U.S. dollar. IPG noted, however, that demand for advertising and marketing services in international markets remained soft. On a constant currency basis, revenue fell 3.6 percent.

Organic revenue dropped 5.4 percent in the period, with IPG blaming geopolitical uncertainty in the first quarter as the cause for clients’ deferral of spending and their cancellation of marketing activities, particularly in public relations and other project-oriented businesses.

The New York-based holding company said revenue at many of its operations continued to reflect weak demand for services, while costs increased, in part, because of higher severance expense and professional fees.

IPG also reported an $11.1 million charge related to the impairment of “long-lived” assets at its Motor Sports operations. The amount reflects $4 million of current quarter capital expenditures contractually required to upgrade and maintain some of the division’s facilities.

The company’s agency brands generated net new business wins of $888 million in the first quarter. In total, IPG companies gained $1.3 billion in new business.