UPDATE 1-Omnicom revenue rallies; shares reach new high
* Q1 EPS 52 cents; Wall St. estimate 50 cents
* Revenue rises 6.3 pct to $2.92 bln; estimate $2.74 bln
* Shares rise 6.4 percent to new year high
NEW YORK, April 20 (Reuters) - Omnicom Group Inc (OMC.N) on Tuesday said quarterly profit slipped, but stronger-than-expected revenue growth and upbeat comments about the state of the advertising business lifted shares 6 percent.
Omnicom, home to a host of advertising, media and public relations agencies, including BBDO Worldwide and DDB Worldwide, benefited from stronger revenue in the United States, Africa and the Middle East. Europe, however, remained a weak spot.
While executives noted that the overall 6.3 percent increase in revenue was aided by easy comparisons from a year ago when spending on advertising and marketing was tanking, they also said business was on the upswing. Sports marketing and public relations, in particular, have bounced back, they said.
"The general business environment continues to stabilize and improve, and as we look at individual countries and regions, we are cautiously optimistic about continued growth," Chief Executive John Wren said on a conference call after the earnings were announced on Tuesday.
Omnicom, whose clients include Anheuser-Busch, McDonald's and Pfizer, said first-quarter income fell to $163.4 million, or 52 cents a share, down from $164.5 million, or 53 cents a share, a year earlier.
The results were slightly higher than the 50 cents-a-share profit that was expected on average by Wall Street analysts, according to Thomson Reuters I/B/E/S.
Revenue rose 6.3 percent to $2.92 billion, due to solid international sales outside of Europe. Like profit, revenue also surpassed expectations.
Organic revenue, a closely watched industry benchmark that excludes foreign currency impact and recent acquisitions, rose 2.1 percent. That marked a sharp improvement from the fourth quarter, when organic revenue declined 6.3 percent.
Shares of Omnicom, one of the bellwethers for the advertising industry, rose $2.59 to $43.71 in early trading on the New York Stock Exchange. Earlier, they touched a new year high of $43.91.
Growing confidence about the health of advertising helped lift other media stocks as well. Interpublic Group (IPG.N), another major advertising holding company, rose 7.3 percent; New York Times Co (NYT.N), Gannett Co (GCI.N) and McClatchy Co (MNI.N), all of which depend on advertising sales, were all up more than 2 percent. (Reporting by Paul Thomasch, editing by Maureen Bavdek)
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