Omnicom Q2 Profit Soars 24%

07 August 2002

Organic new business gains and the inflow of new revenues from thirty-nine recent acquisitions lifted second quarter profits at Omnicom Group by 24%.

Net income increased to $187.3 million (€193.28m; £121.62m), or $1 a share, from $151.4 million (81 cents) in the same period last year. Sales rose 10% to $1.92 billion.

Good news in its own right. Even better: the numbers are kosher according to new accountants KMPG. The squeaky-clean new auditors green-lighted the accounting procedures for Omnicom’s former internet properties, transferred last year to Seneca, a non-public company jointly owned with private equity firm Pegasus Capital LLP [WAMN: 10-Jun-02].

The move allegedly triggered the resignation in June of Omnicom director (and chairman of its audit committee) Robert J Callender, leading to sharp criticism of the Seneca affair both in the Wall Street Journal and Financial Times. Omnicom is also on the receiving end of a class action lawsuit alleging it misrepresented its financial results and misled investors.

KMPG was hired just two months back to replace the discredited Arthur Andersen.

Shares in Omnicom rose Tuesday by $6.09 to $53.30.

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