Interpublic Group reduces losses in the first quarter

by Staff, Brand Republic 01-May-08, 08:55

NEW YORK - Interpublic Group reported a smaller loss in the first quarter and said that the long-running SEC investigation was about to come to a conclusion.

Interpublic's losses in the first quarter of 2008 fell to $62.8m (£31.6m) compared with $125.9m in 2007. First-quarter revenues rose to $1.49bn compared with $1.36bn last time.

Organic revenue increase of 5.1% compared with the first quarter of 2007.

Interpublic said that the first quarter of 2008 had seen strong organic revenue growth in the US, driven by expanding business with existing clients and winning new clients in advertising and public relations.

Internationally, organic revenue growth was driven primarily by net client wins and increased client spending throughout Europe and increases in spending by existing clients in the Asia Pacific region.

Michael Roth, Interpublic's chairman and CEO, said: "Our performance during the first quarter was strong and represents a solid start to the year. We posted competitive organic growth, fuelled by an increasingly broad cross-section of our portfolio of agencies and a balance of additional spending from existing clients and new business wins.

"The financial talent, tools and discipline we have put in place across the organisation are leading to more effective cost controls. These factors are driving significant improvements in operating margin and profitability. We are pleased with this continued progress and believe that the company remains on track to meet our 2008 financial objectives."

Interpublic said the long-running Securities & Exchange Commision investigation into past restatements of its financial statements was coming to a close and it had recognised a provision of $12m, which represents its best estimate of monetary liability arising from the investigation.

"We continue to cooperate with the investigation, and we are currently in advanced settlement discussions with the SEC staff concerning this serious matter, but we cannot at this time predict with certainty the outcome of the settlement negotiations or detail the nature of the commission's allegations. We do, however, expect that the SEC will shortly be in position to make an announcement," Interpublic said in a statement.