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Why Is Omnicom (OMC) Down 7.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for Omnicom (OMC - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Omnicom due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Omnicom Q3 Earnings and Revenues Beat Estimates

Omnicom reported impressive third-quarter 2021 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

The top line was driven by increase in revenues from organic growth of 11.5% and positive impact of 1.6% due to foreign currency translations, but partially offset by a fall in acquisition revenues and net of disposition revenues of 5.9%.

Other Quarterly Details

Across fundamental disciplines, revenues from advertising were up 8.6%, CRM Precision marketing jumped 24.3%, CRM Execution & Support increased 8.3%, CRM Commerce and Brand Consulting was up 18%, CRM Experiential revenues improved 49.9%, Public Relations was up 10.5% and Healthcare increased 6.6%, organically, year over year.

Across regional markets, year-over-year organic revenue growth was 7.7% in the United States, 11.4% in the United Kingdom, 20.2% in the Other North America, 14.9% in the Euro Markets & Other Europe, 15.9% in Latin America and 24.3% in the Middle East and Africa. Asia Pacific revenues were up 19.6% year over year.

EBITA in the quarter came in at $560.3 million compared with 521.6 million in the year-ago quarter. EBITA margin stayed flat year over year at 16.3%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Omnicom has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Omnicom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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