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Omnicom Group Inc. Message Board

  • investora2z investora2z Aug 7, 2013 6:53 AM Flag

    Earnings were good

    Better than expected growth in the emerging markets helped Omnicom report 2.1% growth in revenues in Q2'13. The net income also increased by 2.4%, and the operating margins expanded slightly. The company stated that double-digit growth in China, India, Hong Kong, Singapore, Thailand, Malaysia and Indonesia helped improve the topline performance. This was better than expected, as many had anticipated lower growth due to slowdown in those economies. The stock, which had appreciated before the earnings, corrected from the highs. Now it is 10% below the 52 week high made on July 29 (just before the earnings release). On a 52 week basis, the stock has still done well by appreciating 24%, and looks good for more if it manages a bounce from key levels. The dividend payments continued, and the yield is now around 2.5%. Over the years, the revenues and the net income have shown consistent growth, though the growth has not been as robust in the recent quarters. The focus on the high growth emerging markets and high potential segments of the advertising business can help the company in improving the pace. Online advertising and associated emerging concepts also need to be taken advantage of. Native advertising / social media sponsorship is being preferred by many advertisers. IZEA (IZEA) provides a social media platform where advertisers can pay celebrities and other influencers to tweet, pin, blog, youtube, instagram etc., about their products. This helps advertisers take advantage of celebrity & peer influence to increase customer interest for their products and services. The merger with Publicis (PUB) is an important step, and news flow related to that will also be a factor in determining the trend for the stock. Recently, an investor has sued the company to stop the merger saying that the terms are unfair to Omnicom investors.

 
OMC
69.20-1.64(-2.32%)Jun 29 4:02 PMEDT