Interpublic Group of Companies Inc. Earnings: Beats the Street on Profit Rise

S&P 500 (NYSE:SPY) component Interpublic Group of Companies Inc. (NYSE:IPG) reported net income above Wall Street’s expectations for the fourth quarter. The Interpublic Group of Companies is an advertising and marketing services company that specializes in consumer advertising, interactive marketing and media planning.

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Interpublic Group of Companies Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the advertising agency rose to $261.9 million (50 cents per share) vs. $197.9 million (36 cents per share) in the same quarter a year earlier. This marks a rise of 32.3% from the year-earlier quarter.

Revenue: Rose 3.4% to $2.07 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Interpublic Group of Companies Inc. beat the mean analyst estimate of 39 cents per share. Analysts were expecting revenue of $2.08 billion.

Quoting Management: “Our financial results for the full year and fourth quarter were strong – with organic revenue at the high end of our peer group and significant improvement in both operating margin and earnings per share for 2011. All of our global networks contributed to this performance. We continued to see the benefits of investments in digital talent and capabilities across the portfolio, strong performance in emerging world markets, as well as the vitality of our domestic operations,” said Michael I. Roth, Interpublic’s Chairman and CEO.

“Last year, we made great strides in further strengthening our financial position and concurrently initiated programs that returned over $500 million to our shareholders. Today, we are re-iterating our commitment to those key priorities by announcing a new $300 million share repurchase program and the continuation of our dividend at current levels, and by calling $400 million of our convertible notes. These actions speak to our confidence in the sustainability of Interpublic`s progress. Looking forward, we are targeting 3% organic revenue growth and at least 50 basis points of operating margin improvement for 2012. We remain on track to deliver against our long-term operating goals and to continue driving shareholder value.”

Key Stats:

The company has now beaten estimates the last two quarters. In the third quarter, it topped expectations with net income of 16 cents versus a mean estimate of net income of 10 cents per share.

Looking Forward: The outlook for the company’s next-quarter results are less favorable than they were a month ago. The average estimate for the first quarter of the next fiscal year has fallen to a loss of 8 cents per share from a loss of 7 cents a month ago. The average estimate for the fiscal year is now 64 cents per share, down from 65 cents sixty days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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