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Interpublic (IPG) Meets Q2 Earnings, Misses on Revenues
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The Interpublic Group of Companies, Inc (IPG - Free Report) reported relatively modest second-quarter 2016 results with GAAP earnings of $156.9 million or 38 cent per share up from $121.2 million or 29 cents per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues.
Adjusted income came in at $134.5 million or 33 cents per share. Adjusted earnings for second-quarter 2016 were in line with the Zacks Consensus Estimate.
Revenues for the quarter were $1,917.9 million, up 2.2% from the prior-year period, but short of the Zacks Consensus Estimate of $1,934 million. The company recorded 3.7% growth in organic revenues over the prior year despite a negative foreign currency translation effect of 1.8%. However, net acquisitions positively impacted revenues by 0.3%.
Geographically, Interpublic saw organic growth of 4.6% in the U.S. and 2.3% in the international markets. Results were triggered by new business wins and strength in all geographic regions, led by a notable performance in the domestic market.
Margins
Operating income increased to $224.8 million from $215.8 million in second-quarter 2015, driven by better cost-management efforts. Operating margin also improved to 11.7% from 11.5% in the prior-year quarter. Total operating expenses in the quarter were $1,693.1 million, up 2% year over year.
Balance Sheet
As of Jun 30, 2016, cash, cash equivalents and marketable securities were $675.4 million compared with $855.6 million as of Jun 30, 2015. Total debt was $1.82 billion at quarter end versus $1.76 billion as of Dec 31, 2015.
Share Repurchase Program/Dividend
During the second quarter of 2016, the company repurchased 2.5 million shares for $58.8 million at an average price of $23.26 per share, bringing its tally for the first six months of the year to 5 million shares, at an aggregate cost of $112.5 million and an average price of $22.47 per share.
Interpublic paid a dividend of 15 cents per share for a total consideration of $60.2 million during the reported quarter.
Interpublic reiterated its 2016 financial targets. For 2016, the company reaffirmed organic revenue growth of 3-4%, with 50 basis points of operating margin improvement over the previous year.
Interpublic currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks nclude YuMe, Inc. , Core-Mark Holding Company, Inc. and WageWorks, Inc. . All three stocks carry a Zacks Rank #2 (Buy).
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Interpublic (IPG) Meets Q2 Earnings, Misses on Revenues
The Interpublic Group of Companies, Inc (IPG - Free Report) reported relatively modest second-quarter 2016 results with GAAP earnings of $156.9 million or 38 cent per share up from $121.2 million or 29 cents per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues.
Adjusted income came in at $134.5 million or 33 cents per share. Adjusted earnings for second-quarter 2016 were in line with the Zacks Consensus Estimate.
Revenues
Revenues for the quarter were $1,917.9 million, up 2.2% from the prior-year period, but short of the Zacks Consensus Estimate of $1,934 million. The company recorded 3.7% growth in organic revenues over the prior year despite a negative foreign currency translation effect of 1.8%. However, net acquisitions positively impacted revenues by 0.3%.
Geographically, Interpublic saw organic growth of 4.6% in the U.S. and 2.3% in the international markets. Results were triggered by new business wins and strength in all geographic regions, led by a notable performance in the domestic market.
Margins
Operating income increased to $224.8 million from $215.8 million in second-quarter 2015, driven by better cost-management efforts. Operating margin also improved to 11.7% from 11.5% in the prior-year quarter. Total operating expenses in the quarter were $1,693.1 million, up 2% year over year.
Balance Sheet
As of Jun 30, 2016, cash, cash equivalents and marketable securities were $675.4 million compared with $855.6 million as of Jun 30, 2015. Total debt was $1.82 billion at quarter end versus $1.76 billion as of Dec 31, 2015.
Share Repurchase Program/Dividend
During the second quarter of 2016, the company repurchased 2.5 million shares for $58.8 million at an average price of $23.26 per share, bringing its tally for the first six months of the year to 5 million shares, at an aggregate cost of $112.5 million and an average price of $22.47 per share.
Interpublic paid a dividend of 15 cents per share for a total consideration of $60.2 million during the reported quarter.
INTERPUBLIC GRP Price, Consensus and EPS Surprise
INTERPUBLIC GRP Price, Consensus and EPS Surprise | INTERPUBLIC GRP Quote
Outlook
Interpublic reiterated its 2016 financial targets. For 2016, the company reaffirmed organic revenue growth of 3-4%, with 50 basis points of operating margin improvement over the previous year.
Interpublic currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks nclude YuMe, Inc. , Core-Mark Holding Company, Inc. and WageWorks, Inc. . All three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>