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IPG Posts Q3 Results as SEC Demands Accounting Answers

News, 20 November 2002

Despite the posting of Q3 results way ahead of the same period last year, Interpublic Group is still flailing amid serious accounting problems at its McCann-Erickson Worldwide Europe unit.

On Tuesday IPG released its third quarter results to September 30, reporting net income of $7.5 million (€7.49m; £4.75m) against a net year-on-year loss of $481.1m. However, Q3 revenues slid 7.4% to $1.5 billion from $1.62 billion in 2001.

The posting coincided with IPG’s revelation that the Securities and Exchange Commission has demanded information concerning the bookkeeping bloopers that precipitated the agency group’s $181.3m restatement of past earnings to 1997 [WAMN: 14-Nov-02].

Jack Trout, president of an eponymous marketing strategy consultancy in Greenwich, Connecticut, voiced the concerns of many in the ad business: “This is like the death of a thousand cuts. Interpublic just keeps dribbling out all of this bad news. [It] casts a pall over the ad business. It undermines the whole notion that agencies should be big, messy, holding companies with all of those subsidiaries.”

In a conference call Tuesday Interpublic ceo John J Dooner was in uncharacteristically submissive mode, recalling that he had spent years at McCann’s helm before his elevation to the holding company: “I was at McCann during some of these events, and, you know, I have to tell you that that keeps me or makes me more embarrassed and more humbled, and I think, also, therefore more resolved that this would never happen again.”

Data sourced from: Multiple origins; additional content by WARC staff