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What's in Store for Interpublic (IPG) this Earnings Season?
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The Interpublic Group of Companies, Inc. (IPG - Free Report) is scheduled to report first-quarter 2017 results before the opening bell on Apr 21. Notably, over the trailing four quarters, the company reported an average positive surprise of 31.09%, beating estimates thrice.
New York-based Interpublic is one of the world’s leading providers of marketing and advertising services. It forms an integral part of the communication industry and is highly competitive in nature. Headwinds in the currency market have left investors a little edgy about what the quarter holds for them.
Factors to Influence Q1 Results
Interpublic expects to strengthen its position with new business activities as well as opportunities from existing and new clients. Its impressive results in the past quarters were driven by revenue growth as well as successful cost streamlining initiatives. The company expects the momentum to continue, as it leverages new business wins to improve its growth outlook. The improving position of the agencies, whether in PR, healthcare communications, sports and entertainment, or interactive marketing gets industry recognition on a continuous basis. These augurs well for its long-term growth.
The company’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. The company is expected to achieve targeted levels in the coming quarters based on diversification across emerging regions and collaboration and integration across agencies through technological improvement. Moreover, it continues to look for strategic investments and acquisitions to expand in high-growth regions and key world markets.
Moving ahead, the company plans to focus on de-leveraging and improving its balance sheet and reducing effective cost of debt. The Group’s best-in-industry talent and tools are expected to offer optimal and affordable solutions, thus providing an edge over its peers. The company’s efforts to reduce costs, improve margin, create stronger balance sheet and better capital structure aid in increasing returns and profitability.
For 2017, the company expects organic growth in the range of 3–4%, with 50 basis points improvement in operating margins. On Mar 15, Interpublic paid a quarterly dividend of 18 cents per share to shareholders of record at the close of business on Mar 1, 2017. The new dividend marks a 20% increase from the prior payout of 15 cents.
Earnings Whispers
Our proven model does not conclusively show that Interpublic will beat earnings this time. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at 0.00%.
Interpublic Group of Companies, Inc. (The) Price and EPS Surprise
Zacks Rank: Interpublic has a Zacks Rank #2. Although this increases the predictive power of ESP, we need a positive Earnings ESP in order to be confident about an earnings surprise.
Notably we caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Gentex Corporation (GNTX - Free Report) has an Earnings ESP of +3.23% and a Zacks Rank #3.
Honeywell International Inc. (HON - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #3.
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What's in Store for Interpublic (IPG) this Earnings Season?
The Interpublic Group of Companies, Inc. (IPG - Free Report) is scheduled to report first-quarter 2017 results before the opening bell on Apr 21. Notably, over the trailing four quarters, the company reported an average positive surprise of 31.09%, beating estimates thrice.
New York-based Interpublic is one of the world’s leading providers of marketing and advertising services. It forms an integral part of the communication industry and is highly competitive in nature. Headwinds in the currency market have left investors a little edgy about what the quarter holds for them.
Factors to Influence Q1 Results
Interpublic expects to strengthen its position with new business activities as well as opportunities from existing and new clients. Its impressive results in the past quarters were driven by revenue growth as well as successful cost streamlining initiatives. The company expects the momentum to continue, as it leverages new business wins to improve its growth outlook. The improving position of the agencies, whether in PR, healthcare communications, sports and entertainment, or interactive marketing gets industry recognition on a continuous basis. These augurs well for its long-term growth.
The company’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. The company is expected to achieve targeted levels in the coming quarters based on diversification across emerging regions and collaboration and integration across agencies through technological improvement. Moreover, it continues to look for strategic investments and acquisitions to expand in high-growth regions and key world markets.
Moving ahead, the company plans to focus on de-leveraging and improving its balance sheet and reducing effective cost of debt. The Group’s best-in-industry talent and tools are expected to offer optimal and affordable solutions, thus providing an edge over its peers. The company’s efforts to reduce costs, improve margin, create stronger balance sheet and better capital structure aid in increasing returns and profitability.
For 2017, the company expects organic growth in the range of 3–4%, with 50 basis points improvement in operating margins. On Mar 15, Interpublic paid a quarterly dividend of 18 cents per share to shareholders of record at the close of business on Mar 1, 2017. The new dividend marks a 20% increase from the prior payout of 15 cents.
Earnings Whispers
Our proven model does not conclusively show that Interpublic will beat earnings this time. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at 0.00%.
Interpublic Group of Companies, Inc. (The) Price and EPS Surprise
Interpublic Group of Companies, Inc. (The) Price and EPS Surprise | Interpublic Group of Companies, Inc. (The) Quote
Zacks Rank: Interpublic has a Zacks Rank #2. Although this increases the predictive power of ESP, we need a positive Earnings ESP in order to be confident about an earnings surprise.
Notably we caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Capital Bank Financial Corp. , with an Earnings ESP of +6.82% and a Zacks Rank #3. You can see the complete list of todays’ Zacks #1 (Strong Buy) Rank stocks here.
Gentex Corporation (GNTX - Free Report) has an Earnings ESP of +3.23% and a Zacks Rank #3.
Honeywell International Inc. (HON - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #3.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>