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Interpublic's Loss Wider Than Expected

FISV IPG

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The Interpublic Group of Companies, Inc (IPG - Analyst Report) reported first quarter 2013 net loss of $59.2 million or 14 cents per share versus net loss of $45.9 million or 10 cents in the year-ago quarter. Reported loss was wider than the  Zacks Consensus Estimate of a loss of 13 cents.

Revenue
       
Revenue increased 2.4% year over year to $1,543 million in first quarter 2013. The quarterly results beat the Zacks Consensus Estimate of $1,525 million.  

Organic revenues increased 2.3% in reported the quarter, while foreign currency translations had a negative impact of 0.8%. These were partially offset by a 0.9% contribution from acquisitions.

Margin

Operating loss in the first quarter of 2013 was $42.4 million versus loss of $39.4 million in the year-ago quarter. Operating margin in the quarter was (2.7%) compared with (2.6%) in the year-ago quarter. Operating expenses in the quarter went up 2.5% to $1,585.4 million. During the reported quarter, salaries and related expense increased 2.5% and office and general expenses were up of 2.7%.

Balance Sheet

As of Mar 31, 2013, the company’s cash and cash equivalents and marketable securities amounted to $1.65 billion, compared with $1.59 billion in the year-ago period. Total debt was $2.23 billion compared with $2.45 billion at Dec 31, 2012

During the reported quarter, the company retired $200 million of its 4.75% convertible Senior Notes due 2023.

Share Repurchase Program/ Dividend

During first quarter 2013, the company repurchased 6.2 million shares for $75.8 million. Additionally, the company authorized an increase in its repurchase program from $300 million to $500 million. Dividends paid during the quarter amounted to 7.5 cents per share.

Outlook

Interpublic aims to improve its top-line performance with a continuous focus on share repurchase and increased dividends and its commitment toward cost control is likely to position the company well to drive significant growth in the upcoming year.
    
However, Interpublic currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look now are VisionChina Media Inc with a Zacks Rank#1 (strong Buy)., AirMedia Group Inc and Fiserv, Inc (FISV - Analyst Report), each carrying a Zacks Rank #2 (Buy).
 

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