Following pessimistic forecasts from a number of major global agency holding companies, the stock markets reacted in predictable fashion, downgrading stocks accordingly.
Both Interpublic Group and True North Communications saw shares dive after the former said it would take charges of more than $300 million to restructure the company and integrate True North.
Nor did the recent downgrading of growth prospects by media oracle Robert Coen [WAMN: 15-Jun-01] help one iota. Interpublic stock closed at $30.74, down $5.26, while True North fell $6.08 to close at $34.76.
But a noble knight astride a white charger galloped in to challenge the gloom dragon. Sir Martin Sorrell, chief executive of WPP Group was in best bull mode on Sunday, declaring that his empire had no plans to issue a profit warning, despite the sharp downturn in global advertising revenues.
WPP is continuing to work on the basis that it will meet market expectations this year, predicting pre-tax profits of about £550 million.
Analysts, however, were unconvinced. Many have shuffled their Tarot and revised WPP’s earnings expectations down to between £525 million - £530m.
News sources: Advertising Age - Daily Deadline; The Times (London)