WPP Posts Modest Revenue Gains

BOSTON WPP Group on Tuesday said its revenue for the third quarter improved 11 percent to approximately $1.7 billion, compared with the same period a year ago, based on the current rate of exchange.

On a like-for-like basis, excluding the impact of acquisitions (mainly Cordiant Communica-
tions Group) and currency fluctuations, revenue rose about 1-2 percent.

For the first nine months of 2003, revenue for the London-based holding company was up about 2 percent. On a like-for-like basis, excluding acquisitions and fluctuations, revenue for the period was flat, WPP said.

The company said its operating margin for the second half of the year is likely to be stronger than in the first half, and in line with the revised target of a minimum of 13 percent following the Cordiant acquisition in August.

For the third quarter, North American revenue was up 8 percent compared with the same period a year ago. Revenue from WPP’s Asia Pacific, Latin America, Africa and Middle East operations was especially strong, rising more than 15 percent. WPP was also strong in Continental Europe, where revenue was up 11 perecent, but weakest in the U.K., where revenue rose 6 percent.

Traditional advertising and media services were WPP’s best performing sector, with revenue rising almost 14 percent. Public relations and public affairs were flat.

WPP was somewhat optimistic about the future, noting in a statement that its “prospects for 2004 remain better” than in 2003, in light of the upcoming U.S. presidential election and Athens Olympics potentially driving ad spending. The company cautioned, however, that “worry remains … that 2005 might see inflation as a result of government deficit spending on both sides of the Atlantic. Commodity prices, the long-end of the bond market and gold prices may be signaling this already, and a returned incumbent or new U.S. president might have to take corrective action.”

WPP shares closed on the Nasdaq exchange on Monday at $46.48. The 52-week high was $48.80; the 52-week low was $26.64.