Interpublic revenue beats estimates, margins to improve
Friday, 20 February 2015 00:00
-
- {{hitsCtrl.values.hits}}
Reuters: Advertising company Interpublic Group of Cos Inc’s fourth-quarter revenue topped analysts’ estimates, helped by higher ad spending by businesses in the United States.
Interpublic said margins were set to improve further this year after rising by about 25% in 2014.
The company settled a proxy fight earlier this month with activist investor Elliott Management, which had been pushing for a sale. Elliott, which holds a 6.9% stake in the company, agreed to vote for the company’s board nominees.
FBR Capital Markets analysts hailed the improvement in the company’s operating margins in 2014.
Interpublic, whose margins lag those of larger U.S. rival Omnicom Group Inc, said operating margins rose to 10.5% in 2014.
The company said it excepts operating margin to expand 80- 100 basis points in 2015. It aims to reach operating margins target of 13%.
The company also increased its share buyback program by $300 million and boosted quarterly dividend by 26% to 12 cents per share.
Interpublic, whose clients include General Motors and Microsoft, however, forecast organic growth of 3-4% for 2015, compared with 5.5% in 2014.
The company, whose international operations accounted for 48% of total revenue in the quarter ended Dec. 31, cited a stronger dollar and uncertainty in some markets as reasons for the slower growth.
Interpublic said revenue rose 4% to $2.21 billion in the fourth quarter.
