WPP cuts outlook on U.S., Europe slowdown
LONDON (Reuters) - WPP, the world's largest advertising group, cut its full-year outlook for the second time in two months on Thursday after a slowdown in trading in North America and Continental Europe hit its third quarter.
Martin Sorrell's WPP said it now expected like-for-like revenue growth for the year of between 2.5 to 3 percent, compared with a forecast of 3.5 percent made at the end of August.
The group revised its outlook after recording a slowdown in third quarter like-for-like revenue growth, the key industry metric. Growth was up by 1.9 percent in the three months, compared with a rise of 3.6 percent in the first half.
Sorrell told Reuters he had seen a sharp slowdown in September and said the group was now "exceeding cautious" about the future.
The slowdown in client spending comes at a difficult time for advertising groups, as clients generally start to plan their budgets for 2013 at this time of the year. Next year also lacks any of the major events that boost spending, such as the Olympics or U.S. election.
"Goodness knows frankly what happened in September," he said in an interview. "July and August were ok, they weren't brilliant but they were in the 3 range, but I think we're exceedingly cautious now. There's a lot of concern out there."
Sorrell said the major concern in the business community had switched in recent weeks from the fate of the Euro zone debt crisis to how the U.S. government would tackle its deficit.
Operating margins and operating profits were in line with the budget and ahead of last year in the first nine months.