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Omnicom Group Inc. (OMC - Analyst Report) reported strong fourth quarter 2012 results with a net income of $307.1 million or $1.13 per share compared to $271.9 million or 96 cents in the year-earlier quarter. The earnings for the reported quarter exceeded the Zacks Consensus Estimate by 4 cents.

For full year 2012, the company reported a net income of $998.3 million or $3.61 per share compared to $952.6 million or $3.33 in the previous year. The earnings for 2012 surpassed the Zacks Consensus Estimate by 3 cents.

Total revenues in the reported quarter climbed 2.4% to settle at $3,944.5 million and beat the Zacks Consensus Estimate of $3,933 million. From a geographical perspective, domestic revenue accounted for 51.4% of total revenue and rose 5.1% to reach $2,026.6 million, while international revenue (representing the balance 48.6%) dipped 0.3% year over year to $1,917.9 million.

Based on disciplines, Advertising revenue grew 4.6% to $1,934.9 million in fourth quarter 2012; CRM revenue decreased 2.3% year over year to $1,368.7 million; PR revenue of $347.9 million was up 10.5% year over year; and Specialty revenue of $293.0 million was up 2.0%.

For full year 2012, total revenues were 14,219.4 million, representing a 2.5% year-over-year increase. Domestic revenue for the year increased 4.5% to $7,363.7 million, while international revenue increased 0.5% to $6,855.7 million.

On the basis of disciplines, Advertising revenue grew 4.6% to $6,762.8 million in 2012; CRM revenue rose marginally to $5,122.5 million; PR revenue surged 4.9% to $1,290.8 million; and Specialty revenue of $1,043.3 million was down 2.1% year over year.

Omnicom generated free cash flow of $1,426.1 million in 2012, up from $1,247.3 million in the preceding year. The company had a total debt of $4,455 million at year-end 2012, compared to 3,193 million in the year-ago period. Cash and short-term investments aggregated $2,699 million at year-end 2012 compared to $1,805 million in the prior year.

Omnicom has a strong track record of winning new clients and receiving additional deals from the existing ones. The company’s business mix is well diversified geographically and benefits largely from the growing markets. In addition, the company’s efforts in maintaining controlled expenses and strong global reputation are commendable.

However, the company needs to be wary of stiff competition from other players in the industry such as AirMedia Group Inc. (AMCN) and Publicis Groupe SA (PUBGY), each carrying a Zacks Rank #2 (Buy), and Harte-Hanks Inc. (HHS - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy). Omnicom presently has a Zacks Rank #3 (Hold).

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