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Interpublic (IPG) Surpasses Q2 Earnings & Revenue Estimates

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The Interpublic Group of Companies, Inc. (IPG - Free Report) reported solid second-quarter 2019 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 46 cents per share beat the Zacks Consensus Estimate by 2 cents and improved on a year-over-year basis. Total revenues of $2.52 billion beat the consensus estimate by $397.4 million and increased 5.4% on a year-over-year basis. The top line benefited from organic revenue growth of 3% and positive impact of 8.5% attributable to acquisitions, which were, however, partially offset by a negative impact of 2.4% due to foreign currency movement.

In the reported quarter, the company witnessed organic net revenue growth of 0.6% in the United States and 6.5% in international markets, driven by a combination of net client wins and net higher spending from existing clients. Net revenues of $2.13 billion increased 9.1% year over year.

So far this year, shares of Interpublic have gained 10.4% compared with 6% rise of the industry it belongs to and 17.5% rise of the Zacks S&P 500 composite.

 

Let’s check out the numbers in detail.

Operating Results

Operating income in second-quarter 2019 came in at $264.2 million compared with $249.2 million in the prior-year quarter. Operating margin on net revenues decreased to 12.4% from 12.8% in the year-ago quarter due to increased amortization expenses related to the acquisition of Acxiom. Operating margin on total revenues rose to 10.5% from 10.4% in the year-ago quarter.

EBITA came in at $285.5 million compared with $254.4 million at the end of prior-year quarter. EBITA margin on net revenues rose to 13.4% from 13.1% in the year-ago quarter.

Total operating expenses of $2.26 billion decreased 5.3% year over year.

Balance Sheet

As of Jun 30, 2019, Interpublic had cash and cash equivalents of $614 million compared with $630.5 million at the end of the prior quarter. Total debt was $3.77 billion compared with $3.94 billion at the end of the prior quarter.

Dividend Payment

During the reported quarter, the company declared and paid a cash dividend of 23.5 cents per share amounting to $90.8 million.

2019 Guidance

Interpublic reaffirmed its full-year 2019 guidance. The company continues to expect organic revenue growth of 2-3% and adjusted EBITA margin expansion of 40-50 basis points in 2019.

Zacks Rank & Upcoming Releases

Currently, Interpublic carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting second-quarter 2019 earnings of key players like Insperity (NSP - Free Report) , Waste Connections (WCN - Free Report) and Verisk Analytics (VRSK - Free Report) . While Insperity and Waste Connections are slated to report on Jul 29, Verisk Analytics is scheduled to release results on Jul 30.

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