LONDON, Oct 19 (Reuters) - Shares in WPP fell more than three percent on Thursday on a triple whammy of bad news for the world’s biggest advertising group, less than two months after it issued a major profit warning.
WPP, run by high-profile executive Martin Sorrell, sent shockwaves through the industry in August when it cut its sales target after consumer goods giants curbed spending, prompting its shares to fall 11 percent and record their worst day of trading in 19 years.
The British company’s stock fell 3 percent on Thursday after smaller rival Publicis posted third-quarter sales below forecasts and said the market remained challenging, sending its shares down 7 percent.
Also on Thursday, WPP’s client Unilever reported lower-than-expected third-quarter sales after losing market share to smaller competitors.
And European pay-TV group Sky said it would review its media and buying accounts for the first time in 13 years, work that has largely been provided by WPP, showing the level of competition in the sector.
“(Rival) Omnicom had good results recently but they also had a good Q2, so they’re slightly out of sync with the others,” Numis analyst Paul Richards said. “They’ve had a good new business rate of late and they’re underweight on consumer goods clients, unlike WPP.”
Richards said that the Sky account was not one of the biggest held by WPP, but he said the combined news of the weakness at Publicis and Unilever would weigh on the stock.
WPP is more exposed than its peers to consumer goods groups like Unilever and Procter & Gamble who have cut marketing spend this year. It reports third-quarter trading on Oct. 31.
Reporting by Kate Holton. Editing by Jane Merriman