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Interpublic (IPG) to Report Q3 Earnings: What's in Store?

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The Interpublic Group of Companies, Inc. (IPG - Free Report) is scheduled to report third-quarter 2018 results on Oct 19, before the opening bell.

So far this year, shares of the company have gained 6.3% against the 12.9% decline of the industry it belongs to.

 

Let’s see how things are shaping up for the announcement.

Top Line to Decline Year Over Year

The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.88 billion, indicating year-over-year decrease of 1.1%. The top line is expected to be hurt by the negative impact of net divestures, which is likely to be partially offset by higher organic growth and positive impact of impact of foreign currency movements.

The Zacks Consensus Estimate indicates organic growth of 4.2% in the to-be reported quarter, with 3.75% in the United States and 4.8% in international markets. Internationally, growth is expected across the UK and Continental Europe.

In second-quarter 2018, the company’s revenues increased 9.4% year over year. The growth was driven by favorable foreign currency movement of 1.4% and organic growth of 5.6%. Organic growth was 4.6% in the United States and 7.2% in international markets in the second quarter. However, there was a negative impact of 0.8% due to net divestures.

Bottom Line Expectations

The Zacks Consensus Estimate for earnings per share (EPS) in the to-be-reported quarter is pegged at 46 cents, indicating year-over-year growth of 48.4%. In second-quarter 2018, adjusted earnings increased around 43.3% from the year-ago quarter to 43 cents per share.

Interpublic’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. It continues to look for strategic investments and buyouts to expand in high-growth regions and key world markets.

What Does Our Model Indicate?

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Interpublic has a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.

Stocks to Consider

Here are a few stocks from the broader Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings in third-quarter 2018:

WEX (WEX - Free Report) has an Earnings ESP of +0.49% and a Zacks Rank #2. The company is expected to report results on Nov 7. You can see the complete list of today’s Zacks #1 Rank stocks here.

TransUnion (TRU - Free Report) has an Earnings ESP of +3.54% and a Zacks Rank #3. The company is slated to release results on Oct 23.

Republic Services (RSG - Free Report) has an Earnings ESP of +0.31% and a Zacks Rank #3. The company is scheduled to report results on Oct 25.

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