The Interpublic Group (IPG) reported its financial results for the first quarter of 2011 with net results improving compared with the year-ago quarter. Net loss per share reported was 10 cents, an improvement over a loss of 15 cents in the first quarter of 2011 and the Zacks Consensus Estimate of a loss of 11 cents.
Revenue
Revenue in the first quarter escalated 10.3% year over year to $1.47 billion and was also above the Zacks Consensus Estimate of $1,445 million.
Organic growth in the quarter was 9.3%, with roughly 8.8% growth in U.S. and 10.2% internationally. Currency translation had a positive 1% impact on revenue growth.
Margin
Operating expenses in the quarter grew 8.9% to $1.5 billion due to a 10.3% increase in salaries and related expenses and a 5.4% rise in office and general expenses. Operating margin in the quarter improved to (3.1%) from (4.4%) in the year-ago quarter.
Balance Sheet
Exiting the first quarter, the company’s cash and cash equivalents decreased to $1.85 billion compared with $2.69 billion in the previous quarter. Total debt plummeted to $1.73 billion versus $1.74 billion in the fourth quarter of 2010.
Dividend/Share Repurchase
During the quarter, the company paid dividends amounting to $28.5 million and repurchased 0.85 million share at an average price of $12.36 per share.
Outlook: Management believes that the company remains on track to achieve its 2011 organic revenue growth target of 4%-5% and operating margin target of 9.5%-10%.
Interpublic Group of Companies together with its subsidiaries provides advertising and marketing services worldwide. The company faces stiff competition from its peers like Omnicom Group Inc. (OMC) and WPP plc (WPPGY).
INTERPUBLIC GRP (IPG): Free Stock Analysis Report
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