Interpublic Group Q2 Profit Rises, Meets View

(RTTNews) - Advertising and marketing services company Interpublic Group of Companies, Inc. (IPG) on Friday reported a 24 percent increase in profit for the second quarter from last year, as higher revenues and margins more than offset a debt extinguishment charge.

Adjusted earnings per share for the quarter matched analysts' expectations, while revenues beat their estimates.

Michael Roth, Interpublic's Chairman and CEO said, "We are winning share in digital and marketing services, successfully innovating with our media offerings, and our global ad networks continue to trend positively. Our financial strength remains a source of significant value creation, and we will remain focused on cost discipline and executing on our 2014 plan."

Net income available to IPG common stockholders for the second quarter was $99.4 million or $0.23 per share, up from $79.9 million or $0.18 per share in the same period last year.

The latest quarter's results include a one-time charge of $0.02 per share related to the early extinguishment of the company's 6.25 percent notes due 2014. Excluding this, adjusted earnings per share for the latest quarter were $0.25.

On average, fourteen analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenue for the quarter rose 5 percent to $1.85 billion from $1.76 billion in the prior-year period. Analysts had a consensus revenue estimate of $1.84 billion for the quarter.

During the latest quarter, the effect of foreign currency translation was negative 0.5 percent, the impact of net acquisitions was positive 1.2 percent, and the resulting organic revenue increase was 4.7 percent. Organic revenue growth comprised of a 2.9 percent increase in the U.S. and a 7.1 percent increase internationally.

U.S. revenue for the quarter grew 3 percent from the year-ago period to $1.03 billion, while International revenues rose 8 percent to $820.5 million.

Operating margin for the quarter was 10.6 percent, compared to 10.0 percent in the year-ago period.

Looking ahead, Roth said, "For the full year, we are well-positioned to exceed our organic growth target of 3-4% and improve operating margin by at least 100 basis points, to 10.3% or better."

IPG closed Thursday's trading at $19.03. In Friday's pre-market, the stock is up $0.20 or 1.05 percent to $19.23.