The Interpublic Group of Companies Inc. (IPG) will be reporting its third-quarter 2011 earnings on Friday, October 28, 2011.
The current Zacks Consensus Estimate for earnings per share (EPS) is 10 cents, representing an annualized growth of 26.92%.
With respect to earnings surprises over the trailing four quarters, The Interpublic Group outperformed the Zacks Consensus Estimate in three quarters, while underperformed in one. Average earnings surprise was 8.63%, indicating that the company outperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters.
Second-Quarter Highlights
On July 28, The Interpublic Group of Companies Inc. reported its financial results for the second quarter of 2011 with net results improving over the year-ago quarter. The diluted earnings per share were 19 cents in the reported quarter compared with 15 cents per share a year ago. The recorded EPS marginally beats the Zacks Consensus Estimate by a penny.
Revenue in the second quarter escalated 8.0% year over year to $1,740.7 million, marginally below the Zacks Consensus Estimate of $1,753 million.
Agreement of Estimate Revisions
In the last 30 days, no analyst increased the company’s earnings per share (EPS) estimates for the third quarter, while two analysts decreased the same. However, for fiscal 2011, one analyst increased the estimate while three analysts decreased the same. For fiscal 2012, none increased estimates, while two decreased the same in the last 7 days and six decreased estimate in the last 30 days; anticipating a fiercely competitive environment going ahead.
Magnitude of Estimate Revisions
Estimates over the last 30 days marginally decreased from 11 cents to 10 cents per share for the third quarter of 2011, representing a year-over-year growth of 26.92%.
Estimate for fiscal 2011 showed a marginal decline from 63 cents to 61cents over the last 30 days while that for fiscal 2012 showed a similar trend plummeting from 76 cents to 73 cents. These estimates represented a year-over-year growth of 25.22% for 2011 and 18.98% for 2012.
Our Take
The Interpublic Group is likely to post decent results in the third quarter based on worldwide improved advertisement market and increased consumer spending. The company’s strong liquidity position, control over costs as well as the strategy of diversification across emerging regions through collaboration/integration 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).
INTERPUBLIC GRP (IPG): Free Stock Analysis Report
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WPP GRP PLC (WPPGY): Free Stock Analysis Report
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