We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Interpublic (IPG) Beats Q4 Earnings on Organic Growth
Read MoreHide Full Article
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported healthy fourth-quarter 2016 results with GAAP earnings of $317.6 million or 78 cents per share, up from $260.3 million or 63 cents per share in the year-earlier quarter. The year-over-year increase was primarily due to higher revenues.
Excluding non-recurring items, adjusted earnings for the reported quarter were $303.6 million or 75 cents per share compared with $272.1 million or 66 cents per share in the prior-year quarter. The adjusted earnings for the reported quarter comfortably beat the Zacks Consensus Estimate of 66 cents.
For full year 2016, Interpublic recorded GAAP earnings of $608.5 million or $1.49 per share compared with $454.6 million or $1.09 per share in 2015. Adjusted earnings for 2016 were $556.9 million or $1.37 per share compared with $501.7 million or $1.21 per share in 2015.
Revenues
Revenues for the reported quarter were $2,264.5 million, up 3.1% from the prior-year period. Quarterly revenues marginally beat the Zacks Consensus Estimate of $2,260 million. The year-over-year increase in revenues was driven by 5.3% growth in organic revenues over the prior-year period despite a negative foreign currency translation effect of 2%. Net divestures negatively impacted revenues by 0.2%.
Geographically, Interpublic saw organic growth of 3.3% in the U.S. and 7.8% in the international markets. Results were triggered by new business wins and strength in all geographic regions, led by a notable performance in the domestic market. For full year 2016, the company recorded revenues of $7,846.6 compared with $7,613.8 million in 2015.
Margins
Operating income increased to $485.1 million from $456.4 million in fourth-quarter 2015, driven by better cost-management efforts. Operating margin also improved to 21.4% from 20.8% in the prior-year quarter. Total operating expenses in the quarter were $1,779.4 million, up 2.3% year over year, due to higher salary and other expenses.
Interpublic Group of Companies, Inc. (The) Price, Consensus and EPS Surprise
As of Dec 31, 2016, cash, cash equivalents and marketable securities were $1.1 billion compared with $1.5 billion in the year-ago period. Total debt was $1.69 billion at year- end 2016 compared with $1.75 billion in the prior-year period.
Share Repurchase Program/Dividend
During the quarter, the company repurchased 4.8 million shares for $110 million at an average price of $22.90 per share, bringing its tally for 2016 to 13.3 million shares at an aggregate cost of $303.3 million and an average price of $22.76 per share. The company authorized a new share repurchase program to buy back shares worth $300 million.
Interpublic paid a dividend of 15 cents per share for a total consideration of $58.8 million during the reported quarter. For full year 2016, the company paid $238.4 million in dividends. For 2017, the company increased its quarterly dividend to 18 cents per share.
Moving Forward
For 2017, the company expects organic growth in the range of 3–4%, with a 50 bps improvement in operating margins.
JCDecaux has a long-term earnings growth expectation of 2.8% and is currently trading at a forward P/E of 28.3x.
P. H. Glatfelter has a long-term earnings growth expectation of 9% and is currently trading at a forward P/E of 27.0x.
Svenska Cellulosa has a long-term earnings growth expectation of 15% and is currently trading at a forward P/E of 5.4x.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Interpublic (IPG) Beats Q4 Earnings on Organic Growth
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported healthy fourth-quarter 2016 results with GAAP earnings of $317.6 million or 78 cents per share, up from $260.3 million or 63 cents per share in the year-earlier quarter. The year-over-year increase was primarily due to higher revenues.
Excluding non-recurring items, adjusted earnings for the reported quarter were $303.6 million or 75 cents per share compared with $272.1 million or 66 cents per share in the prior-year quarter. The adjusted earnings for the reported quarter comfortably beat the Zacks Consensus Estimate of 66 cents.
For full year 2016, Interpublic recorded GAAP earnings of $608.5 million or $1.49 per share compared with $454.6 million or $1.09 per share in 2015. Adjusted earnings for 2016 were $556.9 million or $1.37 per share compared with $501.7 million or $1.21 per share in 2015.
Revenues
Revenues for the reported quarter were $2,264.5 million, up 3.1% from the prior-year period. Quarterly revenues marginally beat the Zacks Consensus Estimate of $2,260 million. The year-over-year increase in revenues was driven by 5.3% growth in organic revenues over the prior-year period despite a negative foreign currency translation effect of 2%. Net divestures negatively impacted revenues by 0.2%.
Geographically, Interpublic saw organic growth of 3.3% in the U.S. and 7.8% in the international markets. Results were triggered by new business wins and strength in all geographic regions, led by a notable performance in the domestic market. For full year 2016, the company recorded revenues of $7,846.6 compared with $7,613.8 million in 2015.
Margins
Operating income increased to $485.1 million from $456.4 million in fourth-quarter 2015, driven by better cost-management efforts. Operating margin also improved to 21.4% from 20.8% in the prior-year quarter. Total operating expenses in the quarter were $1,779.4 million, up 2.3% year over year, due to higher salary and other expenses.
Interpublic Group of Companies, Inc. (The) Price, Consensus and EPS Surprise
Interpublic Group of Companies, Inc. (The) Price, Consensus and EPS Surprise | Interpublic Group of Companies, Inc. (The) Quote
Balance Sheet
As of Dec 31, 2016, cash, cash equivalents and marketable securities were $1.1 billion compared with $1.5 billion in the year-ago period. Total debt was $1.69 billion at year- end 2016 compared with $1.75 billion in the prior-year period.
Share Repurchase Program/Dividend
During the quarter, the company repurchased 4.8 million shares for $110 million at an average price of $22.90 per share, bringing its tally for 2016 to 13.3 million shares at an aggregate cost of $303.3 million and an average price of $22.76 per share. The company authorized a new share repurchase program to buy back shares worth $300 million.
Interpublic paid a dividend of 15 cents per share for a total consideration of $58.8 million during the reported quarter. For full year 2016, the company paid $238.4 million in dividends. For 2017, the company increased its quarterly dividend to 18 cents per share.
Moving Forward
For 2017, the company expects organic growth in the range of 3–4%, with a 50 bps improvement in operating margins.
Interpublic currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include JCDecaux SA (JCDXF - Free Report) , National CineMedia, Inc. (NCMI - Free Report) and Social Reality, Inc. (SRAX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
JCDecaux has a long-term earnings growth expectation of 2.8% and is currently trading at a forward P/E of 28.3x.
P. H. Glatfelter has a long-term earnings growth expectation of 9% and is currently trading at a forward P/E of 27.0x.
Svenska Cellulosa has a long-term earnings growth expectation of 15% and is currently trading at a forward P/E of 5.4x.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>