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3d ago INTERPUBLIC OF : meets 3Q profit forecasts
3d ago INTERPUBLIC OF : Announces third quarter and nine months 2014 results
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Interpublic of : Announces Second Quarter and First Half 2014 Results

07/18/2014 | 06:56am US/Eastern


  * Second quarter diluted earnings per share was $0.23, a 28% increase from
    $0.18 per diluted share a year ago; excluding the charge for early
    extinguishment of debt, diluted earnings per share was $0.25
  * Second quarter reported revenue increase of 5.4% and organic revenue
    increase of 4.7%
  * Second quarter operating income grew 12% to $195.8 million, an operating
    margin of 10.6%
  * Second quarter results include a non-operating pre-tax charge of $10.4
    million related to the early extinguishment of the Company's 6.25% Notes due
    2014

Summary

Revenue
  * Second quarter 2014 revenue was $1.85 billion, compared to $1.76 billion in
    the second quarter of 2013, with an organic revenue increase of 4.7%
    compared to the prior-year period. This was comprised of an organic revenue
    increase of 7.1% internationally and 2.9% in the U.S.
  * First half 2014 revenue was $3.49 billion, compared to $3.30 billion in the
    first half of 2013, with an organic revenue increase of 5.6% compared to the
    prior-year period. This was comprised of an organic revenue increase of
    8.0% internationally and 3.8% in the U.S.

Operating Results
  * Operating income in the second quarter of 2014 was $195.8 million, compared
    to operating income of $174.8 million in 2013. Operating margin was 10.6%
    for the second quarter of 2014, compared to 10.0% in 2013.
  * For the first half of 2014, operating income was $184.1 million, compared to
    operating income of $132.4 million in 2013. Operating margin was 5.3% for
    the first half of 2014, compared to 4.0% for the first half of 2013.

Net Results
  * Second quarter 2014 net income available to IPG common stockholders was
    $99.4 million, resulting in earnings of $0.24 per basic and $0.23 per
    diluted share. Excluding the impact of the early extinguishment of the
    Company's 6.25% Senior Unsecured Notes due 2014 (the "6.25% Notes"), diluted
    earnings per share was $0.25. This compares to net income available to IPG
    common stockholders a year ago of $79.9 million, or $0.19 per basic and
    $0.18 per diluted share.
  * First half 2014 net income available to IPG common stockholders was $78.5
    million, resulting in earnings of $0.19 per basic and $0.18 per diluted
    share. Excluding the impact of the early extinguishment of the 6.25% Notes,
    diluted earnings per share was $0.20. This compares to net income available
    to IPG common stockholders a year ago of $20.7 million, or $0.05 per basic
    and diluted share.

"We are pleased to report a quarter of strong revenue, profit and earnings
growth. Our operating results underscore the competitiveness of our agencies,
and the quality of our offerings in key growth markets and disciplines," said
Michael I. Roth, Interpublic's Chairman and CEO. "We are winning share in
digital and marketing services, successfully innovating with our media
offerings, and our global ad networks continue to trend positively. Our
financial strength remains a source of significant value creation, and we will
remain focused on cost discipline and executing on our 2014 plan. For the full
year, we are well-positioned to exceed our organic growth target of 3-4% and
improve operating margin by at least 100 basis points, to 10.3% or better. By
doing so, we can build on recent performance and further enhance shareholder
value."


Operating Results

Revenue
Revenue of $1.85 billion in the second quarter of 2014 increased 5.4% compared
with the same period in 2013. During the quarter, the effect of foreign currency
translation was negative 0.5%, the impact of net acquisitions was positive
1.2%, and the resulting organic revenue increase was 4.7%.

Revenue of $3.49 billion in the first half of 2014 increased 5.7% compared with
the first half in 2013. During the first half of 2014, the effect of foreign
currency translation was negative 0.9%, the impact of net acquisitions was
positive 1.0%, and the resulting organic revenue increase was 5.6%.

Operating Expenses
During the second quarter of 2014, salaries and related expenses were $1.17
billion, an increase of 4.5% compared to the same period in 2013. After
adjusting for currency effects and the impact of net acquisitions, salaries and
related expenses increased 3.2% organically.

During the first half of 2014, salaries and related expenses were $2.36 billion,
an increase of 4.7% compared to the same period in 2013. After adjusting for
currency effects and the impact of net acquisitions, salaries and related
expenses increased 4.3% organically.

Staff cost ratio, which is total salaries and related expenses as a percentage
of total revenue, was 63.2% in the second quarter of 2014 compared to 63.8% in
the same period in 2013, and was 67.6% in the first half of 2014 compared to
68.3% in the same period in 2013.

During the second quarter of 2014, office and general expenses were $485.4
million, an increase of 5.2% compared to the same period in 2013. After
adjusting for currency effects and the impact of net acquisitions, office and
general expenses increased 4.7% organically.

During the first half of 2014, office and general expenses were $946.0 million,
an increase of 3.4% compared to the same period in 2013. After adjusting for
currency effects and the impact of net acquisitions, office and general expenses
increased 3.5% organically.

Non-Operating Results and Tax
Net interest expense of $16.0 million decreased by $15.7 million, or 50%, in the
second quarter of 2014 compared to the same period in 2013. For the first half
of 2014, net interest expense of $30.0 million decreased by $32.1 million, or
52%, compared to the same period in 2013.

Other expense, net was $11.2 million and $9.5 million in the second quarter and
the first half of 2014, respectively. During the second quarter of 2014, we
recorded a pre-tax loss of $10.4 million related to the early extinguishment of
the 6.25% Notes.

The income tax provision in the second quarter of 2014 was $65.3 million on
income before income taxes of $168.6 million, compared to a provision of $62.0
million on income before income taxes of $147.9 million in the same period in
2013. The income tax provision in the first half of 2014 was $63.6 million on
income before income taxes of $144.6 million, compared to a provision of $49.6
million on income before income taxes of $76.9 million in the same period in
2013. The effective income tax rate for the second quarter of 2014 was 38.7%,
compared to 41.9% for the same period in 2013. The effective income tax rate for
the first half of 2014 was 44.0%, compared to 64.5% for the same period in 2013.

Balance Sheet
At June 30, 2014, cash, cash equivalents and marketable securities totaled
$901.4 million, compared to $1.64 billion at December 31, 2013. Total debt was
$1.76 billion at June 30, 2014, compared to $1.66 billion at December 31, 2013.

During the second quarter of 2014, the company issued $500 million in aggregate
principal amount of its 4.20% Senior Notes due 2024. The majority of the net
proceeds were used towards the redemption of all $350 million in aggregate
principal amount of its 6.25% Notes.

Share Repurchase Program and Common Stock Dividend
During the second quarter of 2014, the company repurchased 3.0 million shares of
its common stock at an aggregate cost of $52.4 million and an average price of
$17.81 per share including fees. During the first half of 2014, the company
repurchased 5.6 million shares of its common stock at an aggregate cost of $97.3
million and an average price of $17.51 per share including fees. During the
second quarter of 2014, the company declared and paid a common stock cash
dividend of $0.095 per share, for a total of $39.9 million.

For more information concerning the company's financial results, please refer to
the accompanying slide presentation available on our website,
www.interpublic.com.

                                     # # #

About Interpublic GroupInterpublic Group (NYSE: IPG) is one of the world's leading organizations of
advertising agencies and marketing services companies.  Major global brands
include BPN, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative,
Jack Morton Worldwide, Lowe and Partners, MAGNA GLOBAL, McCann, Momentum,
MRM//McCann, Octagon, R/GA, UM and Weber Shandwick.  Leading domestic brands
include Campbell Mithun, Carmichael Lynch, Deutsch, Gotham Inc., Hill Holliday,
ID Media, Lowe Campbell Ewald, Mullen and The Martin Agency.  For more
information, please visit www.interpublic.com.

                                     # # #

Contact Information
Tom Cunningham
(Press)
(212) 704-1326

Jerry Leshne
(Analysts, Investors)
(212) 704-1439


Cautionary Statement

This release contains forward-looking statements.  Statements in this release
that are not historical facts, including statements about management's beliefs
and expectations, constitute forward-looking statements.  These statements are
based on current plans, estimates and projections, and are subject to change
based on a number of factors, including those outlined under Item 1A, Risk
Factors, in our most recent Annual Report on Form 10-K.  Forward-looking
statements speak only as of the date they are made, and we undertake no
obligation to update publicly any of them in light of new information or future
events.

Forward-looking statements involve inherent risks and uncertainties.  A number
of important factors could cause actual results to differ materially from those
contained in any forward-looking statement.  Such factors include, but are not
limited to, the following:
  * potential effects of a challenging economy, for example, on the demand for
    our advertising and marketing services, on our clients' financial condition
    and on our business or financial condition;
  * our ability to attract new clients and retain existing clients;
  * our ability to retain and attract key employees;
  * risks associated with assumptions we make in connection with our critical
    accounting estimates, including changes in assumptions associated with any
    effects of a weakened economy;
  * potential adverse effects if we are required to recognize impairment charges
    or other adverse accounting-related developments;
  * risks associated with the effects of global, national and regional economic
    and political conditions, including counterparty risks and fluctuations in
    economic growth rates, interest rates and currency exchange rates; and
  * developments from changes in the regulatory and legal environment for
    advertising and marketing and communications services companies around the
    world.

Investors should carefully consider these factors and the additional risk
factors outlined in more detail under Item 1A, Risk Factors, in our most recent
Annual Report on Form 10-K.




           THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
     CONSOLIDATED SUMMARY OF EARNINGS SECOND QUARTER REPORT 2014 AND 2013
                  (Amounts in Millions except Per Share Data)
                                   (UNAUDITED)


                                       ----------------------------------------
                                              Three Months Ended June 30,
                                       ----------------------------------------
                                                                       Fav.
                                                                     (Unfav.)
                                            2014          2013      % Variance
                                       -------------- ------------ ------------
 Revenue:

   United States                          $1,030.9       $996.6       3.4%

   International                             820.5        759.6      8.0%
                                       -------------- ------------ ------------
 Total Revenue                             1,851.4      1,756.2       5.4%
                                       -------------- ------------ ------------


 Operating Expenses:

   Salaries and Related Expenses           1,170.2      1,120.2     (4.5)%

   Office and General Expenses               485.4        461.2     (5.2)%
                                       -------------- ------------ ------------
 Total Operating Expenses                  1,655.6      1,581.4     (4.7)%
                                       -------------- ------------ ------------
 Operating Income                            195.8        174.8      12.0%
                                       -------------- ------------ ------------
 Operating Margin %                          10.6%        10.0%



 Expenses and Other Income:

   Interest Expense                         (22.6)       (37.5)

   Interest Income                             6.6          5.8

   Other (Expense) Income, Net              (11.2)          4.8
                                       -------------- ------------
 Total (Expenses) and Other Income          (27.2)       (26.9)
                                       -------------- ------------


 Income before Income Taxes                  168.6        147.9

 Provision for Income Taxes                   65.3         62.0
                                       -------------- ------------
 Income of Consolidated Companies            103.3         85.9

   Equity in Net Income of
   Unconsolidated Affiliates                   0.4          0.2
                                       -------------- ------------
 Net Income                                  103.7         86.1

   Net Income Attributable to
   Noncontrolling Interests                  (4.3)        (3.3)
                                       -------------- ------------
 Net Income Attributable to IPG               99.4         82.8

   Dividends on Preferred Stock                0.0        (2.9)
                                       -------------- ------------
 Net Income Available to IPG Common
 Stockholders                                $99.4        $79.9
                                       -------------- ------------


 Earnings Per Share Available to IPG
 Common Stockholders:

 Basic                                       $0.24        $0.19

 Diluted                                     $0.23        $0.18



 Weighted-Average Number of Common
 Shares Outstanding:

 Basic                                       421.1        425.1

 Diluted                                     428.1        448.3



 Dividends Declared Per Common Share        $0.095       $0.075THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
      CONSOLIDATED SUMMARY OF EARNINGS SECOND QUARTER REPORT 2014 AND 2013
                   (Amounts in Millions except Per Share Data)
                                  (UNAUDITED)


                                     ------------------------------------------
                                             Six Months Ended June 30,
                                     ------------------------------------------
                                                                       Fav.
                                                                     (Unfav.)
                                          2014           2013       % Variance
                                     -------------- -------------- ------------
 Revenue:

   United States                        $1,969.9       $1,891.0       4.2%

   International                         1,519.0        1,408.2       7.9%
                                     -------------- -------------- ------------
 Total Revenue                           3,488.9        3,299.2       5.7%
                                     -------------- -------------- ------------


 Operating Expenses:

   Salaries and Related Expenses         2,358.8        2,252.3     (4.7)%

   Office and General Expenses             946.0          914.5     (3.4)%
                                     -------------- -------------- ------------
 Total Operating Expenses                3,304.8        3,166.8     (4.4)%
                                     -------------- -------------- ------------
 Operating Income                          184.1          132.4      39.0%
                                     -------------- -------------- ------------
 Operating Margin %                         5.3%           4.0%



 Expenses and Other Income:

   Interest Expense                       (42.8)         (74.3)

   Interest Income                          12.8           12.2

   Other (Expense) Income, Net             (9.5)            6.6
                                     -------------- --------------
 Total (Expenses) and Other Income        (39.5)         (55.5)
                                     -------------- --------------


 Income before Income Taxes                144.6           76.9

 Provision for Income Taxes                 63.6           49.6
                                     -------------- --------------
 Income of Consolidated Companies           81.0           27.3

   Equity in Net Income of
   Unconsolidated Affiliates                 0.3            0.3
                                     -------------- --------------
 Net Income                                 81.3           27.6

   Net Income Attributable to
   Noncontrolling Interests                (2.8)          (1.1)
                                     -------------- --------------
 Net Income Attributable to IPG             78.5           26.5

   Dividends on Preferred Stock                -          (5.8)
                                     -------------- --------------
 Net Income Available to IPG Common
 Stockholders                              $78.5          $20.7
                                     -------------- --------------


 Earnings Per Share Available to IPG
 Common Stockholders:

 Basic                                     $0.19          $0.05

 Diluted                                   $0.18          $0.05



 Weighted-Average Number of Common
 Shares Outstanding:

 Basic                                      421.9         419.7

 Diluted                                    428.5         425.1



 Dividends Declared Per Common Share       $0.19          $0.15THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
           RECONCILIATION OF LOSS ON EARLY EXTINGUISHMENT OF DEBT
                 (Amounts in Millions except Per Share Data)
                                 (UNAUDITED)


                     --------------------------------------------------------
                                 Three Months Ended June 30, 2014
                     --------------------------------------------------------
                         As           Loss on Early       Ex-Loss on Early
                        Reported    Extinguishment of     Extinguishment of
                                          Debt                  Debt
-----------------------------------------------------------------------------
 Income Before Income
 Taxes                  $168.6       $(10.4)               $179.0

 Provision for Income
 Taxes                  (65.3)           3.8               (69.1)

 Effective Tax Rate      38.7%                              38.6%

 Equity in Net Income
 of Unconsolidated                                            0.4
 Affiliates                0.4

 Net Income
 Attributable to                                            (4.3)
 Noncontrolling
 Interests               (4.3)
                     ------------ --------------------- ---------------------
 Net Income Available
 to IPG Common           $99.4        $(6.6)               $106.0
 Stockholders - Basic
 and Diluted
                     ------------ --------------------- ---------------------

  -----------------------------------------------------------------------------


 Weighted-Average
 Number of Common                                           421.1
 Shares Outstanding -
 Basic                   421.1

 Add: Effect of
 Dilutive Securities

      Restricted
 Stock, Stock Options                                         7.0
 and Other Equity
 Awards                    7.0
                     ------------                       ---------------------
 Weighted-Average
 Number of Common
 Shares Outstanding -
 Diluted                 428.1                              428.1
                     ------------                       ---------------------

-----------------------------------------------------------------------------


 Earnings Per Share
 Available to IPG        $0.24       $(0.01)                $0.25
 Common Stockholders
 - Basic

 Earnings Per Share
 Available to IPG        $0.23       $(0.02)                $0.25
 Common Stockholders
 - Diluted



           THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
             RECONCILIATION OF LOSS ON EARLY EXTINGUISHMENT OF DEBT
                  (Amounts in Millions except Per Share Data)
                                  (UNAUDITED)


                      ---------------------------------------------------------
                                    Six Months Ended June 30, 2014
                      ---------------------------------------------------------
                           As          Loss on Early         Ex-Loss on Early
                        Reported     Extinguishment of        Extinguishment
                                            Debt                  of Debt
-------------------------------------------------------------------------------
 Income Before Income
 Taxes                   $144.6       $(10.4)                $155.0

 Provision for Income
 Taxes                   (63.6)           3.8                (67.4)

 Effective Tax Rate       44.0%                               43.5%

 Equity in Net Income
 of Unconsolidated                                              0.3
 Affiliates                 0.3

 Net Income
 Attributable to                                              (2.8)
 Noncontrolling
 Interests                (2.8)
                      ------------ ---------------------- ---------------------
 Net Income Available
 to IPG Common            $78.5        $(6.6)
 Stockholders - Basic
 and Diluted                                                  $85.1
                      ------------ ---------------------- ---------------------

-------------------------------------------------------------------------------


 Weighted-Average
 Number of Common                                             421.9
 Shares Outstanding -
 Basic                    421.9

 Add: Effect of
 Dilutive Securities

      Restricted
 Stock, Stock Options                                           6.6
 and Other Equity
 Awards                     6.6
                      ------------                        ---------------------
 Weighted-Average
 Number of Common
 Shares Outstanding -
 Diluted                  428.5                               428.5
                      ------------                        ---------------------

-------------------------------------------------------------------------------


 Earnings Per Share
 Available to IPG         $0.19       $(0.01)                 $0.20
 Common Stockholders -
 Basic

 Earnings Per Share
 Available to IPG         $0.18       $(0.02)                 $0.20
 Common Stockholders -
 Diluted






This announcement is distributed by GlobeNewswire on behalf of 
GlobeNewswire clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
    
Source: INTERPUBLIC GROUP OF COMPANIES, INC. via GlobeNewswire
[HUG#1830013]

 
  

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