Interpublic Earnings: Net Income Sinks

S&P 500 (NYSE:SPY) component Interpublic Group of Companies Inc. (NYSE:IPG) reported its results for the third 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 Inc. Earnings Cheat Sheet

Results: Net income for Interpublic Group of Companies Inc. fell to $71.6 million (15 cents per share) vs. $211 million (40 cents per share) a year earlier. This is a decline of 66.1% from the year-earlier quarter.

Revenue: Fell 3.3% to $1.67 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Interpublic Group of Companies Inc. fell short of the mean analyst estimate of 17 cents per share. It fell short of the average revenue estimate of $1.76 billion.

Quoting Management: “This year has proven to be more challenging on the revenue front than anticipated, but we continue to manage the business effectively and will deliver increased full-year profitability relative to 2011,” said Michael I. Roth, Interpublic`s Chairman and CEO. “We will also continue to use our strong balance sheet to drive shareholder value. While the third quarter showed strength internationally and in emerging economies, as well as from our digital offerings across the portfolio, this was not enough to offset incremental client caution being felt across our industry, the effect of client losses from last year and the comparison to very strong growth in the third quarter of 2011. With full-year 2012 organic revenue growth of at least one percent and a continued focus on costs, our target of a 50 point basis point improvement in operating margin remains attainable. We have the tools to help clients succeed in today`s complex consumer and media landscape and, for 2013, we are positioned to achieve competitive top line growth, further margin expansion and continued return of capital to our owners.”

Key Stats:

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 22 cents versus a mean estimate of net income of 21 cents per share.

Revenue has dropped in the past two quarters. In the second quarter, revenue declined 1.4% to $1.72 billion from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from 51 cents a share to 52 cents over the last thirty days. For the fiscal year, the average estimate has moved down from 81 cents a share to 79 cents over the last ninety days.

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

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