Interpublic Group Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Interpublic Group (NYSE:IPG) will unveil its latest earnings on Friday, October 26, 2012. The Interpublic Group of Companies is an advertising and marketing services company that specializes in consumer advertising, interactive marketing and media planning.

Interpublic Group Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 17 cents per share, a rise of 6.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 20 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 18 cents during the last month. Analysts are projecting profit to rise by 3.9% versus last year to 79 cents.

Past Earnings Performance: The company topped forecasts last quarter after being in line with estimates the quarter prior. In the second quarter, it reported net income of 22 cents per share versus a mean estimate of 21 cents. Two quarters ago, it reported net loss of 10 cents per share.

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Stock Price Performance: Between July 27, 2012 and October 22, 2012, the stock price rose 77 cents (7.6%), from $10.12 to $10.89. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 10, 2012, when shares rose for nine straight days, increasing 11.8% (+$1.12) over that span. It saw one of its worst periods between November 11, 2011 and November 23, 2011 when shares fell for nine straight days, dropping 13.2% (-$1.26) over that span.

A Look Back: In the second quarter, profit fell 2.6% to $101.9 million (22 cents a share) from $104.6 million (19 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 1.4% to $1.72 billion from $1.74 billion.

Analyst Ratings: With 13 analysts rating the stock a buy, one rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 10.6% in the third quarter of the last fiscal year, 3% in the fourth quarter of the last fiscal year and 2.2%in the first quarter before dropping in the second quarter.

Wall St. Revenue Expectations: On average, analysts predict $1.7 billion in revenue this quarter, a decline of 1.7% from the year-ago quarter. Analysts are forecasting total revenue of $7.07 billion for the year, a rise of 0.9% from last year’s revenue of $7.01 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.03 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.02 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 1.8% to $7.24 billion while liabilities rose by 0.4% to $7.02 billion.

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

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