Interpublic’s (IPG) second quarter results are in line with expectations when it comes to earnings. The Holding Company has reported a revenue increase of 2.2 percent and organic revenue increase of 3.7 percent.
“We are pleased to report another quarter of solid revenue and profit increases that position us to achieve our financial objectives. Despite increased macro uncertainty, the tone of the business remains sound. We therefore continue to believe that we will deliver at the high end of our original 3 percent to 4 percent organic growth target for the full year, as well as expand operating margin by 50 basis points or better,” said Michael I. Roth, Interpublic’s Chairman and CEO.
The second quarter 2016 revenue increased 2.2 percent to USD 1.92 billion, compared to USD 1.88 billion in the second quarter of 2015, with an organic revenue increase of 3.7 percent compared to the prior-year period. This was short of the Zacks Consensus Estimate of USD 1,934 million. The numbers comprise an organic increase of 4.6 percent in the US and 2.3 percent internationally, and was achieved despite a negative foreign currency translation effect of 1.8 percent. Net acquisitions positively impacted revenues by 0.3 percent. The first half 2016 revenue increased 3 percent to USD 3.66 billion, compared to USD 3.55 billion in the first half of 2015, with an organic revenue increase of 5.1 percent compared to the prior-year period. This comprised an organic revenue increase of 6.4 percent in the US and 3.2 percent internationally.
Geographically, Interpublic saw organic growth of 4.6 percent in the US and 2.3 percent in the international markets. Results were triggered by new business wins and strength in all geographic regions, led by a notable performance in the domestic market.
“During the quarter, we once again saw contributions from a broad range of our creative, marketing services and media agencies, and our digital capabilities across the group were significant drivers of growth. The high caliber of our people and the effectiveness of our offerings on behalf of clients are what have fueled our strong organic revenue growth during the first half of this year. Going forward, we will stay vigilant in terms of costs, and continue to focus on achieving the appropriate levels of profit conversion. We also remain committed to our robust capital return programs, which have been significant incremental drivers of shareholder value creation,” Mr Roth stated.