Interpublic sees growth from emerging markets

Thursday, 5 May 2011 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Interpublic Group, one of the world’s largest advertising companies, posted first-quarter revenue growth that outpaced rivals on emerging markets sales and backed its full-year revenue forecast.

Last week Ireland-based WPP, the world’s largest advertising group by sales, upgraded its fiscal outlook after posting strong quarterly results.

Interpublic backed its 2011 forecast of 4-5% organic revenue growth and 9.5-10 per cent growth in operating margins.

The company expects revenue from Japan, hit by last month’s earthquake and tsunami, to decline in 2011, and said it is difficult to forecast inventory disruptions in the automobile and technology industries - traditionally big advertising spenders. Japan contributes about 1.5-2 per cent of Interpublic’s total revenue.

“We expect to see continued growth in Latin America. The same is true for India... We view China as an opportunity for us,” a company executive said on a conference call.

All advertising companies are steadily increasing their footprint in emerging markets to offset slower growth in mature economies.

Interpublic saw first-quarter operating margin slide to 3.1 per cent from 4.4 per cent a year ago.

First-quarter organic revenue at the company grew 9.3 per cent. Excluding acquisitions, revenue rose 18 per cent in Asia-Pacific and about 14 per cent in Latin America.

In the same period, Omnicom reported organic growth of 5.2 per cent, Publicis posted 6.5 per cent and WPP recorded 6.7 per cent.

Interpublic’s first-quarter net loss narrowed to $ 48.1 million, or 10 cents a share, from $71.5 million, or 15 cents a share, a year earlier.