Interpublic Group, the globe’s second largest agency holding company (after WPP Group), saw its share freefall 24% on Monday after announcing a request by its audit committee that it postpone publication by one week of its second-quarter results.
No further explanation of the delay was forthcoming save that the committee needed more time to review IPG’s accounts. Following the scrutiny, the committee will reconvene next Monday.
The news precipitated an immediate plunge in the value of IPG stock, diving over 25% on the New York Stock Exchange before recovering marginally to close 23.83% down at $14.99 (€15.38; £9.66). This compares with a 52-week high of $34.98 in April.
• There was also bad news Monday for IPG rivals WPP Group, Publicis Groupe and Havas when they were downgraded by New York merchant bank Schroder Salomon Smith Barney. All were relegated from ‘neutral’ to ‘underperform’, citing disappointing first quarters as the primary reason.
Opined SSSB analyst Stefan Burgstaller: “There is a gradual advertising recovery under way. The first quarter was disappointing and the second quarter showed that firms are at the bottom of the recovery. We are expecting flat organic revenue growth in the second half, which will put pressure on earnings before interest and tax margins.”
Following a 4.13% slide in London Monday afternoon to £4.295, WPP shares opened this morning at 08.30 BST down even further to £3.89. On the Paris Euronext market at 09.30 EST Publicis lost 5.58% overnight to stand at €19.5; while Havas was down 5.44% at €4.14.
Data sourced from: The Wall Street Journal Online; BrandRepublic (UK); additional content by WARC staff