By Ronnie Harui


Dentsu Group's shares slumped after it cut full-year earnings forecasts due to weaker-than-expected business performance and one-off charges that adversely affect its underlying operating profit and operating margin.

The company's shares were recently 10.0% lower at 3,972 yen ($26.41) after sliding as much as 10.4% earlier Wednesday. The stock is headed for its largest daily price decline since October 2008, according to FactSet.

The Japanese advertising and public relations company said Tuesday after market close that net profit dropped to Y16.6 billion for the three months ended Sept. 30 from Y27.6 billion a year earlier. Third-quarter operating profit declined to Y37.5 billion from Y41.9 billion a year earlier, while net revenue rose to Y279 billion from Y274 billion.

"Our third quarter performance continued to show the impact of the reduced spend from clients in the technology and finance sectors, as well as project delays within Customer Transformation & Technology" business, said Hiroshi Igarashi, president and chief executive officer of Dentsu Group, in a statement.

Dentsu said the charges relate to severance and its operations in Germany, Australia and Switzerland. The board considers these charges to be one-offs, the company said. The company also expects extra costs in the fourth quarter relating to its business simplification, it said.

Dentsu lowered its 2023 revenue and net-profit forecasts to Y1.26 trillion from Y1.28 trillion and to Y33.30 billion from Y69.20 billion, respectively.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

11-14-23 2324ET