Advertisement

UPDATE 2-Interpublic slashes organic growth forecast, shares fall

UPDATE 2-Interpublic slashes organic growth forecast, shares fall
From Reuters - October 24, 2017

(Reuters) - U.S. advertising company Interpublic Group (IPG.N) slashed its annual forecast for organic revenue growth and reported disappointing third-quarter earnings on Tuesday, as many of its biggest clients cut back on spending.

Shares of Interpublic, one of the worlds Big Four advertising groups, fell nearly 5 percent to $19.59 in morning trading.

Interpublic, like its peers, is under pressure to adapt to an industry transformed by Google and Facebook (FB.O), which dominate online advertising - a channel that helps advertisers target consumers better.

Consulting firms such as Accenture (ACN.N) and IBM (IBM.N) have also taken market share away from traditional ad groups in recent years by expanding their marketing divisions through aggressive acquisitions.

Organic revenue was negatively impacted by broader trends that are being felt throughout much of the industry, Interpublic Chief Executive Michael Roth said in a statement.

Shares of Interpublics rival Big Four firms - Britains WPP (WPP.L), Frances Publicis (PUBP.PA) and New York-based Omnicom (OMC.N) - all fell 2 to 3 percent on Tuesday.

While Publiciss (PUBP.PA) third-quarter sales missed market forecasts last week, hurt by fierce competition in online ads, WPP in August cut its sales target, as consumer goods giants curbed spending.

Omnicom, however, reported better-than-expected third-quarter revenue last week, benefiting from surprisingly strong demand in North America.

New York-based Interpublic, which counts Microsoft and Coca-Cola among its clients, now expects full-year organic revenue growth of 1 to 2 percent, down from the previously expected 3 to 4 percent range.

Advertisement

Continue reading at Reuters »