Interpublic Posts Seventh Consecutive Quarterly Loss

04 November 2004

It gets worse for Interpublic Group, the globe's third largest agency holding company (by 2003 revenues).

After six straight quarters dunked in red ink, IPG's loss for the third quarter in 2004 widened to an eye-watering $578.4 million (€452.33m; £313.58m) - due to $608.4m in charges and other special items. This compares year-on-year with a net loss of $327.1m.

Wall Street was shaken by the extent of the deficit. According to a consensus survey, analysts had expected a profit of $14m.

The charges that dragged down the group's performance relate only in part to its ongoing reorganization. Another significant factor is a $98.6 million provision for income taxes.

Speaking in a conference call to analysts Wednesday, Interpublic president/ceo David Bell said: "Turnarounds are messy and often unpredictable in the short term. And that's true at this company. [Although] still moving in the right turnaround direction, our results this quarter are decidedly mixed."

'Mixed'? Many analysts thought that the understatement of the year. Opined Morgan Stanley's Michael J Russell: "It's a messy bunch of financial reports. It's hard to tell what's comparable." And it didn't help that the results were released at 8:30 in the morning after an interminably long and tense election-night vote count.

Russell, however, took heart from news of some 700 staff increases within Interpublic agencies. "The more jobs there are, the more work there is to be done, so this is proof things are getting better or may be getting better," he opined.

Bell, meantime, told Wall Street's finest he would be "spending more of my time on business development". He believes the recovery process will take between nine to twenty-one months.

Data sourced from New York Times; additional content by WARC staff