* On track to meet FY organic revenue growth target
* 2nd-qtr revenue $3.87 bln vs est. $3.8 bln
* Earnings/shr $1.20 vs est $1.17
* U.S. revenue rises 7.8 pct
(Adds CEO and analyst comments, details; updates share
By Abhirup Roy
July 22 Omnicom Group Inc, the No.1 U.S.
advertising company, said it was sticking with its annual
organic revenue growth target, showing little effect from its
aborted $35 billion merger with France's Publicis Groupe
In contrast, the French company warned earlier on Tuesday it
would be "very difficult" to meet its annual organic sales
growth target, partly due to the failure of the proposed merger.
Omnicom shares, which have gained 9 percent since the deal
fell apart in May, rose as much as 1.4 percent on Tuesday.
"(Omnicom) seem to have been much less distracted by the
deal collapse than their former partner," Exane BNP Paribas
analyst Adrien de Saint Hilaire said.
Omnicom forecast full-year organic revenue growth of around
4 percent in February. The company's revenue rose around 2.5
percent in each of the last two years.
The reiteration of the forecast allayed some concerns that
Omnicom's second-quarter earnings would suffer because
management was focused on completing the merger.
"I think right now we think from an operations or
efficiencies standpoint our companies are making all the right
moves and the underlying operating performance right there,"
Chief Executive John Wren said in post-earnings call.
Omnicom is home to agencies such as BBDO Worldwide, TBWA
Worldwide and Goodby, Silverstein & Partners, creator of the
famous "Got Milk?" campaign.
INCREASED AD SPENDING
The company reported a better-than-expected 6.4 percent rise
in revenue to $3.87 billion in the quarter ended June 30, helped
by an increase in ad spending, particularly in the United
Omnicom's organic revenue grew 5.8 percent in the quarter.
Analysts on average were expecting revenue of $3.8 billion,
according to Thomson Reuters I/B/E/S.
U.S. ad spending has been gaining momentum as consumer goods
companies try to encourage reluctant consumers, suffering from
stagnant wages, to crack open their wallets.
The growing popularity of private label brands has also
pushed national brand owners such as Kraft Foods Group Inc
to increase marketing budgets.
Global ad spending rose nearly 6 percent to $545.4 billion
in 2014 and is expected to reach $662.7 billion by 2018,
according to statistics website Statista. (bit.ly/1jT5QjT)
Omnicom, whose clients include McDonald's Corp
Adidas AG and Apple Inc, said ad revenue
increased 10.5 percent in the quarter.
Revenue from the United States, which accounts two thirds of
the total, rose 7.8 percent, while international revenue
increased 4.9 percent.
Net income available for common shareholders rose 13.2
percent to $318.9 million.
Excluding items, the company earned $1.20 per share, beating
the average analyst estimate of $1.17 per share.
Omnicom's operating margin slipped to 14.2 percent, from
14.4 percent a year earlier. The deal with Publicis was expected
to boost the company's margins.
Smaller rival Interpublic Group of Cos Inc reported
better-than-expected quarterly revenue last week, boosted by
strong growth in the UK and higher ad spending in its core U.S.
(Reporting by Abhirup Roy and Lehar Maan in Bangalore; Editing
by Kirti Pandey, Saumyadeb Chakrabarty and Ted Kerr)