The Interpublic Group of Companies Inc. (IPG) will be reporting its second-quarter 2011 earnings on Thursday, July 28, 2011.
The current Zacks Consensus Estimate for earnings per share (EPS) is 20 cents, representing an annualized growth of 33.85%.
With respect to earnings surprises over the trailing four quarters, Interpublic Group outperformed the Zacks Consensus Estimate in all the quarters. Average earnings surprise was 22.38%, which implies that the company outperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters.
First Quarter Highlights
The Interpublic Group 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 2010 and the Zacks Consensus Estimate of a loss of 11 cents.
Revenue in the first quarter escalated 10.3% year over year to $1.47 billion, surpassing the Zacks Consensus Estimate of $1,445 million.
Agreement of Estimate Revisions
In the last 30 days, no analyst increased the company’s earnings per share (EPS) estimates for the second quarter, while two analysts decreased the same. However, for fiscal 2011, one analyst increased the estimate while two analysts decreased the same. For fiscal 2012, one analyst increased estimates, while three decreased the same; anticipating a fiercely competitive environment going ahead.
Magnitude of Estimate Revisions
Estimates over the last 30 days remained intact at 20 cents per share for the second quarter of 2011, representing a year-over-year growth of 33.85%.
Estimate for fiscal 2011 remained static at 65 cents over the last 30 days while that for fiscal 2012 showed a similar trend at an unchanged 81 cents. These estimates represented a year-over-year growth of 32.22% for 2011 and 25.25% for 2012.
Our Take
The Interpublic Group is likely to post decent results in the second quarter based on improved advertisement market and economic conditions worldwide, supported by increased consumer spending. The company’s strategy of diversification across emerging regions and collaboration/integration across agencies through technological improvement show positive indication going forward.
New York based, Interpublic Group of Companies Inc. together with its subsidiaries, provides advertising and marketing services worldwide. The company directly competes with its peers, such as Omnicom Group Inc. (OMC), Publicis Groupe SA (PUBGY.PK) and WPP plc (WPPGY).
We currently maintain a long-term Neutral recommendation on the stock. Interpublic Group has a Zacks #3 Rank, which translates into a short-term Hold rating (1-3 months).
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