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Omnicom (OMC) Q3 Earnings and Revenues Exceed Estimates
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Omnicom Group Inc. (OMC - Free Report) reported solid third-quarter 2018 results wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of $1.24 per share beat the Zacks Consensus Estimate by 3 cents and came ahead of the year-ago figure by 11 cents.
Total revenues of $3,714.3 million beat the consensus mark by 24 million but decreased 0.1% year over year. The year-over-year decrease was due to negative foreign exchange rate impact of 1.7% and a decrease in acquisition revenues, net of disposition revenues of 0.9%, partially offset by organic revenue growth of 2.9%.
So far this year, shares of Omnicom have declined 4.6% against 2.9% rise of the Zacks S&P 500 Composite.
Let’s check out the numbers in detail.
Revenues by Segment
Advertising segment revenues of $1,992.1 million increased 2% year over year. The segment accounted for 53.6% of total revenues in the reported quarter.
CRM Consumer Experience revenues increased 0.6% year over year to $637.7 million. The segment contributed 17.2% to total revenues.
CRM Execution & Support revenues decreased 13.9% year over year to $465.6 million. It accounted for 12.5% of total revenues.
PR (public relations) revenues of $356 million improved 0.7% on a year-over-year basis. It accounted for 9.6% of total revenues.
Healthcare revenues of $262.9 million were up 10.5% year over year. It contributed 7.1% of total revenues.
Revenues by Regions
Across regional markets, Asia Pacific recorded a 6.5% increase in revenues to $437.9 million. Revenues from United States came in at $1,992.7 million.
However, revenues from the Middle East and Africa were down 2.6% to $63.7 million. Other North America revenues reduced 10.7% year over year to $102.8 million and that of Latin America declined 13.3% year over year to $102 million. Euro & Other Europe declined 0.3% to $657.9 million and the U.K. recorded revenues of $357.9 million, down 0.1% year over year.
Operating Results
Operating profit in third-quarter 2018 increased 6.8% year over year to $502.3 million. Operating margin increased to 13.5% compared with 12.6% in the year-ago quarter. Operating expenses of $3,212 million were down 1.8% from the year-ago quarter.
Earnings before interest, taxes and amortization or EBITA for the reported quarter were $527.5 million, slightly up from $498.1 million in the year-ago quarter. EBITA margin came in at 14.2% compared with 13.4% in the year-ago quarter.
Omnicom Group Inc. Price, Consensus and EPS Surprise
Omnicom generated free cash flow of $274.1 million in third-quarter 2018 compared with $373.8 million in the prior-year quarter. The company had a total debt of $4,868 million at the end of the reported quarter with cash, cash equivalents and short-term investments of $2,106 million compared with a respective $4,966 million and $1,851 million in 2017.
For the twelve months ended Sep 30, 2018, return on invested capital (ROIC) and return on equity (ROE) aggregated 20.6% and 48.2%, respectively. During the period from 2008 through Sep 30, 2018, Omnicom distributed 105% of net income to shareholders through dividends and share repurchases.
Investors interested in the broader Business Services sector are keenly awaiting earnings reports from key players like Automatic Data Processing (ADP - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Automatic Data Processing will report first-quarter fiscal 2019 on Oct 31, Waste Management and Republic Services will release third-quarter 2018 results on Oct 25.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Omnicom (OMC) Q3 Earnings and Revenues Exceed Estimates
Omnicom Group Inc. (OMC - Free Report) reported solid third-quarter 2018 results wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of $1.24 per share beat the Zacks Consensus Estimate by 3 cents and came ahead of the year-ago figure by 11 cents.
Total revenues of $3,714.3 million beat the consensus mark by 24 million but decreased 0.1% year over year. The year-over-year decrease was due to negative foreign exchange rate impact of 1.7% and a decrease in acquisition revenues, net of disposition revenues of 0.9%, partially offset by organic revenue growth of 2.9%.
So far this year, shares of Omnicom have declined 4.6% against 2.9% rise of the Zacks S&P 500 Composite.
Let’s check out the numbers in detail.
Revenues by Segment
Advertising segment revenues of $1,992.1 million increased 2% year over year. The segment accounted for 53.6% of total revenues in the reported quarter.
CRM Consumer Experience revenues increased 0.6% year over year to $637.7 million. The segment contributed 17.2% to total revenues.
CRM Execution & Support revenues decreased 13.9% year over year to $465.6 million. It accounted for 12.5% of total revenues.
PR (public relations) revenues of $356 million improved 0.7% on a year-over-year basis. It accounted for 9.6% of total revenues.
Healthcare revenues of $262.9 million were up 10.5% year over year. It contributed 7.1% of total revenues.
Revenues by Regions
Across regional markets, Asia Pacific recorded a 6.5% increase in revenues to $437.9 million. Revenues from United States came in at $1,992.7 million.
However, revenues from the Middle East and Africa were down 2.6% to $63.7 million. Other North America revenues reduced 10.7% year over year to $102.8 million and that of Latin America declined 13.3% year over year to $102 million. Euro & Other Europe declined 0.3% to $657.9 million and the U.K. recorded revenues of $357.9 million, down 0.1% year over year.
Operating Results
Operating profit in third-quarter 2018 increased 6.8% year over year to $502.3 million. Operating margin increased to 13.5% compared with 12.6% in the year-ago quarter. Operating expenses of $3,212 million were down 1.8% from the year-ago quarter.
Earnings before interest, taxes and amortization or EBITA for the reported quarter were $527.5 million, slightly up from $498.1 million in the year-ago quarter. EBITA margin came in at 14.2% compared with 13.4% in the year-ago quarter.
Omnicom Group Inc. Price, Consensus and EPS Surprise
Omnicom Group Inc. Price, Consensus and EPS Surprise | Omnicom Group Inc. Quote
Balance Sheet & Cash Flow
Omnicom generated free cash flow of $274.1 million in third-quarter 2018 compared with $373.8 million in the prior-year quarter. The company had a total debt of $4,868 million at the end of the reported quarter with cash, cash equivalents and short-term investments of $2,106 million compared with a respective $4,966 million and $1,851 million in 2017.
For the twelve months ended Sep 30, 2018, return on invested capital (ROIC) and return on equity (ROE) aggregated 20.6% and 48.2%, respectively. During the period from 2008 through Sep 30, 2018, Omnicom distributed 105% of net income to shareholders through dividends and share repurchases.
Zacks Rank & Upcoming Releases
Currently, Omnicom carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Business Services sector are keenly awaiting earnings reports from key players like Automatic Data Processing (ADP - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Automatic Data Processing will report first-quarter fiscal 2019 on Oct 31, Waste Management and Republic Services will release third-quarter 2018 results on Oct 25.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>