Interpublic warns of a fall in second-quarter earnings

by Anna Clarke, Brand Republic 27-Apr-01

The Interpublic Group of Companies has announced a rise in net income of 2.6% for the first quarter to $65.6m (£45.51m), up from last year’s figure of $63.7m (£44.19m).

LONDON (Brand Republic) - The Interpublic Group of Companies has announced a rise in net income of 2.6% for the first quarter to $65.6m (£45.51m), up from last year’s figure of $63.7m (£44.19m).

Worldwide revenue grew year-on-year 6% in the quarter to $1.3bn (£0.9bn), compared with $1.23bn (£0.85bn) last time. If it had not been for fluctuating currencies, the increase would have been 11%.

Despite this, the company warned that its second-quarter earnings would come in at between 40 cents (28p) and 45 cents (31p) a share, about 30% below analyst expectations of 61 cents and also below last year’s 56 cents.

John Dooner, chairman and chief executive officer, said that despite a challenging revenue environment, Interpublic’s “relentless drive to manage costs” had led to double-digit operating profit growth.

“Looking forward, we remain cautious about revenue comparisons in 2001, particularly the first half of the year. We remain committed to double-digit operating profit growth, and have increased our emphasis on cost controls to ensure the highest possible return on revenues,” he said.

At close of business yesterday, Interpublic’s share price had dropped 19 cents on the New York Stock Exchange to $36.31.