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Interpublic (IPG) Surpasses Q2 Earnings & Revenue Estimates

Zacks Equity Research

The Interpublic Group of Companies, Inc. IPG 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.

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

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, Waste Connections WCN and Verisk Analytics VRSK. 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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