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Interpublic says 2003 will be flat after disastrous 2002

NEW YORK - Interpublic has told investors that it sees a flat year ahead, but says that that improving its balance sheet is a priority.

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Speaking at the UBS Warburg Media Conference in New York, chairman and CEO John Dooner and chief financial officer Sean Orr warned that revenues would be flat year-on-year in 2003.

The warning came at the same time Zenith Optimedia published its forecasts for next year's adspend, saying it was predicting a 3% increase in advertising this year.

The pair were appearing at the end of a disastrous year for the Interpublic Group of Companies that has seen the company's share price plummet after it was forced to restate the last five year's earnings when $181.3m in extra charges were uncovered. Interpublic is being investigated by the SEC over the accounting problems.

The company's credit rating has been reduced to one notch above "junk" status by the ratings agency Standard & Poor's, and when it published its third-quarter results last month, even Orr was forced to admit that the 7.4% decline in revenues was "unacceptable".

Dooner assured investors that 2003 would bring brighter times for Interpublic. He told the conference: "What I call 'the stupids' should be behind us as well."

Orr said that "securing and improving the health of the balance sheet is one of, if not the most important, priority we have."

Shares in Interpublic closed down by 6.85% at $13.26 yesterday, a fall of 99 cents, and well off its year high of $34.98.

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