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Interpublic Group (IPG) Q3 Earnings Beat Estimates, Rise Y/Y

The Interpublic Group of Companies, Inc. IPG reported better-than-expected third-quarter 2021 results.

Adjusted earnings (excluding 3 cents from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 28.6%. Moreover, the bottom line increased 19% on a year-over-year basis.

Net revenues of $2.3 billion beat the consensus estimate by 3.3% and increased 6.4% on a year-over-year basis. The upside can be attributed to organic net revenues increase of 15% and foreign currency translation was positive 1.1%. Total revenues of $2.54 billion increased 19.6% year over year.

In the past year, shares of Interpublic have surged 98.5% compared with a 49.3% increase of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research

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Operating Results

Operating income in the quarter came in at $351.5 million, up 41.4% from the prior-year quarter’s figure. Operating margin on net revenues surged to 15.5% from 12.7% in the year-ago quarter. Operating margin on total revenues also increased to 13.8% from 11.7% in the year-ago quarter.

Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise

Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise
Interpublic Group of Companies, Inc. The Price, Consensus and EPS Surprise

Interpublic Group of Companies, Inc. The price-consensus-eps-surprise-chart | Interpublic Group of Companies, Inc. The Quote

Adjusted EBITA came in at $373 million, up 38.2% from the prior-year quarter. Adjusted EBITA margin on net revenues increased to 16.5% from 13.8% in the year-ago quarter. Adjusted EBITA margin on total revenues rose to 14.7% from 12.7% in the year-ago quarter. Total operating expenses of $2.2 billion increased 16.7% year over year.

Balance Sheet

As of Sep 30, 2021, Interpublic had cash and cash equivalents of $2.49 billion compared with $2.34 billion at the end of the prior quarter. Total debt was $3.45 billion compared with $3.47 billion at the end of the prior quarter.

During the third quarter, the company paid out a cash dividend of 27 cents per share, amounting to $106.2 million.

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

Upcoming Releases

Investors interested in the broader Zacks Business Services sector are keenly awaiting second-quarter 2021 earnings reports of key players like Waste Connections WCN, Waste Management WM and Republic Services RSG. While Waste Connections will release results on Oct 27, Waste Management and Republic Services will report the same on Oct 26 and Oct 28, respectively.


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