Omnicom shrugs off slump with profits rise
NEW YORK - Omnicom Group managed to shrug off signs of the advertising slump by posting an 11% increase in net profits to $128.6m (£88.3m) for the first quarter of 2002.
Earnings per share for the first quarter of 2002 increased 10% to $0.68 from $0.62 in the first quarter of 2001.
Worldwide revenue increased 8% to $1.7bn from $1.6bn in the first quarter of 2001. US revenue for the first quarter of 2001 increased 14% to $1bn compared with $896.6m in 2001. International revenue for the first quarter of 2001 increased 1% to $710.3m compared with $704.5m in 2001.
The closely watched organic revenue, which excludes acquisitions, was up 3.7% beating rival WPP Group, which reported its first quarter results last week. It also looked likely that Omnicom's results will top those of US competitor the Interpublic Group of Companies when it releases numbers later this week.
In a comference call Omnicom CEO John Wren said that the company was expecting a 10% increase in revenue on the year. He added on a further positive note, that "from a client perspective, spending has really stabilised" as advertisers who had held back spending on their advertising were willing to spend again.
The strong results follow Omnicom's full-year results reported in February, when the world's third-largest advertising group reported a 12.2% increase in pre-tax profits to $900m for the year, boosted by new-business performance.
In December, Omnicom Wren said the company was aiming for double-digit earnings growth in 2002 -- in contrast to a more pessimistic outlook from Sir Martin Sorrell, chairman and CEO of WPP Group.
Omnicom owns the ad agency networks BBDO Worldwide, DDB Worldwide, and TBWA Worldwide.
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