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Interpublic (IPG) Beats on Q4 Earnings, Hikes Dividend by 5.9%
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The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected fourth-quarter 2020 results.
Adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate by 4.9% but declined 2.3% on a year-over-year basis.
Net revenues of $2.28 billion marginally beat the consensus estimate but declined 21.3% on a year-over-year basis. The downside was caused by organic net revenues fall of 5.4% and negative 0.8% impact of net dispositions. Total revenues of $2.55 billion declined 12.1% year over year.
So far this year, shares of Interpublic have gained 13.1% against 8.6% decline of the industry it belongs to.
Let’s check out the numbers in detail.
Operating Results
Operating income in fourth-quarter 2020 came in at $223.4 million compared with $491.3 million in the prior-year quarter. Operating margin on net revenues fell to 9.8% from 20.2% in the year-ago quarter. Operating margin on total revenues fell to 8.8% from 16.9% in the year-ago quarter.
Adjusted EBITA came in at $244.9 million, compared with $512.7 million at the end of the prior-year quarter. Adjusted EBITA margin on net revenues declined to 10.7% from 21.1% in the year-ago quarter. Adjusted EBITA margin on total revenues rose to 9.6% from 17.6% in the year-ago quarter.
Total operating expenses of $2.33 billion declined 3.5% year over year.
Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise
As of Dec 31, 2020, Interpublic had cash and cash equivalents of $2.51 billion compared with $1.63 billion at the end of the prior quarter. Total debt was $3.47 billion compared with $3.96 billion at the end of the prior quarter.
Dividend Hike
On Feb 10, 2021, the company announced that its board of directors declared a cash dividend of 27 cents per share, up 5.9% from its prior dividend of 25.5 cents. The dividend will be payable to its shareholders on Mar 15, as of record date Mar 1.
During the quarter the company paid out a cash dividend of 25.5 cents per share, amounting to $99.5 million.
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate and increased 18.2% year over year. Revenues of $536.3 million beat the consensus mark by 1.7% and rose 6% year over year.
IHS Markit’s fourth-quarter 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter’s level.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and inched up 0.7% year over year.
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Interpublic (IPG) Beats on Q4 Earnings, Hikes Dividend by 5.9%
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected fourth-quarter 2020 results.
Adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate by 4.9% but declined 2.3% on a year-over-year basis.
Net revenues of $2.28 billion marginally beat the consensus estimate but declined 21.3% on a year-over-year basis. The downside was caused by organic net revenues fall of 5.4% and negative 0.8% impact of net dispositions. Total revenues of $2.55 billion declined 12.1% year over year.
So far this year, shares of Interpublic have gained 13.1% against 8.6% decline of the industry it belongs to.
Let’s check out the numbers in detail.
Operating Results
Operating income in fourth-quarter 2020 came in at $223.4 million compared with $491.3 million in the prior-year quarter. Operating margin on net revenues fell to 9.8% from 20.2% in the year-ago quarter. Operating margin on total revenues fell to 8.8% from 16.9% in the year-ago quarter.
Adjusted EBITA came in at $244.9 million, compared with $512.7 million at the end of the prior-year quarter. Adjusted EBITA margin on net revenues declined to 10.7% from 21.1% in the year-ago quarter. Adjusted EBITA margin on total revenues rose to 9.6% from 17.6% in the year-ago quarter.
Total operating expenses of $2.33 billion declined 3.5% year over year.
Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise
Interpublic Group of Companies, Inc. The price-consensus-eps-surprise-chart | Interpublic Group of Companies, Inc. The Quote
Balance Sheet
As of Dec 31, 2020, Interpublic had cash and cash equivalents of $2.51 billion compared with $1.63 billion at the end of the prior quarter. Total debt was $3.47 billion compared with $3.96 billion at the end of the prior quarter.
Dividend Hike
On Feb 10, 2021, the company announced that its board of directors declared a cash dividend of 27 cents per share, up 5.9% from its prior dividend of 25.5 cents. The dividend will be payable to its shareholders on Mar 15, as of record date Mar 1.
During the quarter the company paid out a cash dividend of 25.5 cents per share, amounting to $99.5 million.
Currently, Interpublic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate and increased 18.2% year over year. Revenues of $536.3 million beat the consensus mark by 1.7% and rose 6% year over year.
IHS Markit’s fourth-quarter 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter’s level.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and inched up 0.7% year over year.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
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