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.
Omnicom Group Inc. (OMC - Free Report) reported mixed second-quarter 2023 results, wherein the company’s earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Earnings of $1.81 per share beat the consensus estimate by 0.6% and increased 7.7% year over year. Total revenues of $3.6 billion lagged the consensus estimate by 0.3% but increased 1.2% year over year.
The increase in the top line resulted from an increase of 3.4% in revenues from organic growth, partially offset by a negative impact of 0.7% due to foreign currency translations and a 1.5% fall in acquisition revenues, net of disposition revenues.
Omnicom shares have gained 45.3% over the past year, significantly outperforming the 23.6% rally of the industry it belongs to and the 15.7% rise of the Zacks S&P 500 composite.
Across fundamental disciplines, revenues from Advertising & Media were up 5.1% compared with our estimated growth of 6.3%. Precision marketing revenues jumped 2.3% compared with our estimate of 14% growth. Commerce and Brand Consulting revenues were up 2.4% versus our estimated growth of 8.2%.
Experiential revenues improved 9.2% compared with our estimated improvement of 16.1%. Public Relations revenues increased 0.1% compared with our estimation of 11.7% growth. Healthcare revenues increased 3%, organically, year over year versus our estimated growth of 6.4%.
Across regional markets, year-over-year organic revenue growth was 2.4% in the United States compared with our estimated growth of 7.3%. U.K. revenues grew 2.5% versus our estimation of 9.8% growth. Other North America grew 8.4%, close to our expectation of 8.5% growth.
For Euro Markets & Other Europe, organic revenue growth was 2.6% compared with our expectation of 7.9% growth. For Latin America, organic revenue growth was 6.9% compared with our expectation of 14.4% growth. Middle East and Africa grew 4% versus our estimated growth of 20.7%. Asia Pacific was up 7.5% year over year compared with our estimated growth of 4.7%.
Margin Performance
EBITA in the quarter came in at $570 million, up 1.4% year over year. EBITA margin was 15.8%, flat with the year-ago quarter. Operating profit of $550.7 million increased 1.7% year over year. The operating margin increased 10 bps to 15.3%.
2023 View
The company expects organic growth to be between 3.5% and 5%. It expects operating margin to be at the top of the 15-15.4% range.
Zacks Rank and Stocks to Consider
Omnicom currently carries a Zacks Rank #3 (Hold).
Investors interested in the Zacks Business Services sector can consider the following better-ranked stocks.
The Zacks Consensus Estimate for the bottom line is pegged at $1.01 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.7 billion, up 15.8% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.
Avis Budget (CAR - Free Report) currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR had an average surprise of 65.2% in the previous four quarters.
S&P Global (SPGI - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $3.09 per share, up 10% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.05 billion, up 1.9% from the prior-year reported figure. SPGI had an average surprise of 3.1% in the previous four quarters.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Omnicom's (OMC) Q2 Earnings Beat Estimates, Increase Y/Y
Omnicom Group Inc. (OMC - Free Report) reported mixed second-quarter 2023 results, wherein the company’s earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Earnings of $1.81 per share beat the consensus estimate by 0.6% and increased 7.7% year over year. Total revenues of $3.6 billion lagged the consensus estimate by 0.3% but increased 1.2% year over year.
The increase in the top line resulted from an increase of 3.4% in revenues from organic growth, partially offset by a negative impact of 0.7% due to foreign currency translations and a 1.5% fall in acquisition revenues, net of disposition revenues.
Omnicom shares have gained 45.3% over the past year, significantly outperforming the 23.6% rally of the industry it belongs to and the 15.7% rise of the Zacks S&P 500 composite.
Omnicom Group Inc. Price and Consensus
Omnicom Group Inc. price-consensus-chart | Omnicom Group Inc. Quote
Organic Growth Across Disciplines and Regions
Across fundamental disciplines, revenues from Advertising & Media were up 5.1% compared with our estimated growth of 6.3%. Precision marketing revenues jumped 2.3% compared with our estimate of 14% growth. Commerce and Brand Consulting revenues were up 2.4% versus our estimated growth of 8.2%.
Experiential revenues improved 9.2% compared with our estimated improvement of 16.1%. Public Relations revenues increased 0.1% compared with our estimation of 11.7% growth. Healthcare revenues increased 3%, organically, year over year versus our estimated growth of 6.4%.
Across regional markets, year-over-year organic revenue growth was 2.4% in the United States compared with our estimated growth of 7.3%. U.K. revenues grew 2.5% versus our estimation of 9.8% growth. Other North America grew 8.4%, close to our expectation of 8.5% growth.
For Euro Markets & Other Europe, organic revenue growth was 2.6% compared with our expectation of 7.9% growth. For Latin America, organic revenue growth was 6.9% compared with our expectation of 14.4% growth. Middle East and Africa grew 4% versus our estimated growth of 20.7%. Asia Pacific was up 7.5% year over year compared with our estimated growth of 4.7%.
Margin Performance
EBITA in the quarter came in at $570 million, up 1.4% year over year. EBITA margin was 15.8%, flat with the year-ago quarter. Operating profit of $550.7 million increased 1.7% year over year. The operating margin increased 10 bps to 15.3%.
2023 View
The company expects organic growth to be between 3.5% and 5%. It expects operating margin to be at the top of the 15-15.4% range.
Zacks Rank and Stocks to Consider
Omnicom currently carries a Zacks Rank #3 (Hold).
Investors interested in the Zacks Business Services sector can consider the following better-ranked stocks.
Aptiv (APTV - Free Report) currently has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for the bottom line is pegged at $1.01 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.7 billion, up 15.8% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.
Avis Budget (CAR - Free Report) currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR had an average surprise of 65.2% in the previous four quarters.
S&P Global (SPGI - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $3.09 per share, up 10% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.05 billion, up 1.9% from the prior-year reported figure. SPGI had an average surprise of 3.1% in the previous four quarters.