Ad firm Interpublic beats profit estimates on higher client spending

(Reuters) - Interpublic Group of Cos Inc beat Wall Street estimates for quarterly profit and revenue on Friday, as the U.S. advertising company benefited from higher client spending worldwide, sending its shares up as much as 6 percent.

Interpublic said organic revenue - a closely watched measure in the ad industry that excludes foreign exchange rate changes and income from acquisitions - rose 6.4 percent in the first quarter, beating analysts’ expectations of a 3.8 percent rise, according to research firm FactSet.

The company, home to Madison Avenue icon McCann, has been spending billions to acquire data mining firms like Acxiom Corp’s marketing business to compete with the targeted advertising models of Alphabet’s Google and Facebook.

Interpublic said leading client sectors included consumer packaged goods, financial services and retail.

WPP, the world’s biggest advertising company, on Friday reported a sharp drop in first-quarter underlying sales in North America as the loss of work from clients such as Ford took a toll on its most important market.

Interpublic’s U.S. and international organic revenue rose 5.7 percent and 7.7 percent, respectively, in the quarter, much above FactSet estimates of 2.9 percent and 3.6 percent.

Last week, rival Omnicom Group Inc also posted a better-than-expected rise in quarterly organic revenue.

Net loss available to Interpublic’s common stockholders narrowed to $8 million, or 2 cents per share, in the quarter ended March 31, from $14.1 million, or 4 cents per share, a year earlier.

Excluding items, Interpublic earned 11 cents per share, beating the average analyst estimate of 4 cents per share, according to IBES data from Refinitiv.

Interpublic’s net revenue rose 13 percent to $2 billion, above analysts’ estimates of $1.96 billion.

The company’s shares were up 5.5 percent at $23.51 in late morning trade, while Omnicom was up nearly 2 percent. WPP, which reiterated its full-year forecasts, rose about 5 percent.

Reporting by Akanksha Rana in Bengaluru; Editing by Maju Samuel