UPDATE 2-Interpublic sees more ad money ahead, shares jump
* Q4 EPS 24 cents vs 39 cents a year ago
* Rev down 5.3 pct at $1.8 bln vs Street estimate $1.7 bln
* Says business tone is improving
* Shares up more than 12 percent (Recasts, adds stock jump, other details, byline)
By Paul Thomasch
NEW YORK, Feb 26 (Reuters) - Interpublic Group (IPG.N) said quarterly profit fell 38 percent, but revenue held up better than expected and company executives indicated that advertisers are starting to consider putting more money into marketing.
Shares of the advertising company, home to well-known agencies like McCann-Erickson, rose more than 12 percent on Friday after the results and comments about 2010, including a projection profitability would be "significantly improved."
Fourth-quarter net income dropped to $129.4 million, or 24 cents a share, from $209.8 million, or 39 cents a share, a year earlier.
Revenue fell to $1.8 billion from $1.9 billion, but that was a smaller decline than analysts had expected. And organic revenue, a closely watched industry benchmark, fell 8.2 percent, showing marked improvement from steeper declines in preceding quarters.
While Interpublic's advertising and media agencies have yet to fully bounce back from the deep cuts in marketing budgets by corporate clients, the company is seeing signs of better times ahead.
"We have begun to see clients re-engage with many of our project-driven marketing service companies and there's also a greater willingness on the part of our clients to commit to annual spending plans," Chief Executive Michael Roth said on a conference call. "That wasn't the case at the end of last year."
One major roadblock for Interpublic has been the troubles of the auto industry, particularly General Motors, which Interpublic counts as a major client.
Asked about the auto sector, Roth said, "It can't get any worse than it was in 2009." He added that spending cuts by automakers have slowed, and that Interpublic has added new work from BMW, Chrysler and Volkswagen (VOWG_p.DE).
In the meantime, Interpublic is trying to cut its own expenses. For the full year, it took about $500 million of costs out its business.
Shares of Interpublic rose 12.4 percent to $7.59 on the New York Stock Exchange. (Reporting by Paul Thomasch; editing by John Wallace, Dave Zimmerman)
- Air strike kills 15 civilians in Yemen by mistake: officials
- North Korea executes leader's powerful uncle in rare public purge |
- Twitter backtracks on block feature after users revolt
- Pope attacks mega-salaries and wealth gap in peace message
- Insight: In Yemen, al Qaeda gains sympathy amid U.S. drone strikes