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Factors Setting the Tone for Omnicom's (OMC) Earnings in Q3

Zacks Equity Research

Omnicom Group Inc.’s OMC third-quarter 2019 results are likely to reflect a year-over-year decline in revenues but an increase in earnings.

So far this year, shares of the company have gained 2.5% against the 4.6% decline of the industry it belongs to.

Expectations in Detail

The Zacks Consensus Estimate for the company's third-quarter revenues is pegged at $3.64 billion, suggesting a 2.1% decline from the year-ago quarter’s actual figure. The top line is expected to reflect the impact of decline in acquisition revenues, net of disposition revenues, partially offset by higher organic revenue growth.

In second-quarter 2019, revenues of $3.7 billion decreased 3.6% year over year. Acquisition revenues, net of dispositions revenues, declined 3.8%. In the same period, organic revenue growth was 2.8%.

For quarterly earnings, the Zacks Consensus Estimate is pegged at $1.3, indicating a year-over-year increase of 4.8%. The bottom line is expected to have benefited from the change in business mix resulting from the disposition of several non-strategic or underperforming agencies over the past year. Also, operational efficiency efforts through investments in real estate, back-office services, procurement and IT are expected to get reflected in the bottom-line number.

In second-quarter 2019, adjusted earnings of $1.68 per share increased 5% on a year-over-year basis.

What Our Model Suggests

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.

Omnicom has an Earnings ESP of 0.00% and a Zacks Rank #4.

Stocks That Warrant a Look

Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to deliver a positive earnings surprise:

Spotify SPOT currently has an Earnings ESP of +26.98% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kforce KFRC presently carries an Earnings ESP of +2.24% and a Zacks Rank of 3.

Fiserv FISV has an Earnings ESP of +3.68% and a Zacks Rank #3.

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Omnicom Group Inc. (OMC) : Free Stock Analysis Report
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