Interpublic Group of Companies Inc. Earnings Cheat Sheet: Tops Analysts’ Expectations

S&P 500 (NYSE:SPY) component Interpublic Group of Companies Inc. (NYSE:IPG) reported net income above Wall Street’s expectations 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 Earnings Cheat Sheet for the Third Quarter

Results: Net income for the advertising agency rose to $208 million (40 cents per share) vs. $42.4 million (8 cents per share) in the same quarter a year earlier. This is a more than fourfold rise from the year earlier quarter.

Revenue: Rose 11% to $1.73 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: IPG reported adjusted net income of 16 cents per share. By that measure, the company beat the mean estimate of 10 cents per share. It beat the average revenue estimate of $1.65 billion.

Quoting Management: “Our strong organic revenue, operating profit and net income growth for both the third quarter and first nine months of 2011 was driven by a broad cross-section of our portfolio, including all marketing disciplines, domestically and in the major emerging economies,” said Michael I. Roth, Interpublic’s Chairman and CEO. “We saw significant contributions from activity in the digital arena, where all of our agencies are embedding digital expertise at the core of their professional offerings. We demonstrated effective cost discipline that resulted in high profit conversion and also continued to return capital to our shareholders. Though macro uncertainty remains, we are confident that our performance for the nine months has positioned us to meet or surpass our targets of 4-5% organic revenue growth and operating margin of 9.5% or better. This level of performance, combined with the quality of our talent and our strong financial fundamentals, positions us to deliver significant shareholder appreciation for the balance of 2011 and beyond.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 7.6% to $1.74 billion in the second quarter. The figure rose 10% in the first quarter from the year earlier and climbed 11.7% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 19 cents versus a mean estimate of net income of 20 cents per share.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 41 cents per share, up from 40 cents ninety days ago. For the fiscal year, the average estimate has moved down from 63 cents a share to 61 cents over the last sixty days.

Competitors to Watch: Omnicom Group Inc. (NYSE:OMC), Publicis Groupe S.A. (PUBGY), MDC Partners Inc. (NASDAQ:MDCA), Lamar Advertising Company (NASDAQ:LAMR), Charm Communications Inc (NASDAQ:CHRM), Focus Media Holding Ltd. (NASDAQ:FMCN), Inuvo, Inc. (AMEX:INUV), National CineMedia, Inc. (NASDAQ:NCMI), interCLICK Inc (NASDAQ:ICLK), and ValueClick, Inc. (NASDAQ:VCLK).

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(Source: Xignite Financials)