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Omnicom (OMC) Q3 Earnings Surpass Estimates, Revenues Miss

Zacks Equity Research

Omnicom Group Inc. OMC reported mixed third-quarter 2019 results wherein its earnings beat the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings of $1.32 per share beat the consensus mark by 2 cents and increased 6.5% on a year-over-year basis.

Total revenues of $3.6 billion missed the consensus estimate by $13 million and decreased 2.4% year over year on a reported basis. The year-over-year decrease was due to negative foreign exchange rate impact of 1.5% and decline in acquisition revenues, net of disposition revenues of 3.1%, offset by organic revenue growth of 2.2%.

Shares of Omnicom have gained 12.3% over the past year, against 8.6% decline of the industry it belongs to.

Other Quarterly Details

Across fundamental disciplines, advertising increased 3.4%, CRM Consumer Experience was up 1.8%, CRM Execution & Support declined 1.5%, Public Relations decreased 3.8% and Healthcare increased 9.5%, organically, year over year.

Across regional markets, year-over-year organic growth was 2.7% in the United States, 2.7% for Other North America, 6.6% for Latin America, 3.0% in the United Kingdom, 1.6% for the Euro Markets and Other Europe and 0.4% for Asia Pacific. Middle East and Africa was down 4.5%.

Operating profit in the quarter came in at $473.3 million. Operating margin increased to 13.1% from 12.7% in the year-ago quarter.

Zacks Rank & Stocks to Consider

Omnicom currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are CoreLogic CLGX, S&P Global SPGI and Paychex PAYX. While CoreLogic sports a Zacks Rank #1 (Strong Buy), S&P Global and Paychex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings (three to five years) growth rate for CoreLogic, S&P Global and Paychex is estimated at 11%, 10% and 9%, respectively.

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