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) Misses Q3 Earnings and Revenue Estimates
Read MoreHide Full Article
The Interpublic Group of Companies, Inc.’s (IPG - Free Report) third-quarter 2023 earnings and revenues missed the Zacks Consensus Estimate.
Adjusted earnings (considering 7 cents from non-recurring items) were 70 cents per share, which lagged the consensus estimate by 6.7%, but increased 11.1% on a year-over-year basis.
Net revenues of $2.31 billion missed the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion.Total revenues of $2.68 billion increased 1.5% year over year.
Interpublic Group of Companies, Inc. (The) Price, Consensus and EPS Surprise
The operating income in the quarter came in at $376.8 million, which increased 10.2% from the prior-year quarter’s levels but was lower than our expected $404.1 million. The operating margin on net revenues increased to 16.3% from 14.9% in the year-ago quarter and exceeded our estimated 14.6%. The operating margin on total revenues also increased to 14.1% from 13% in the year-ago quarter.
Adjusted EBITA was $397.2 million, increasing 11.5% from the prior-year quarter’s level but missing our estimated $457.2 million. Adjusted EBITA margin on net revenues increased to 17.2% from 15.5% in the year-ago quarter and beat our estimated 15.4%. Total operating expenses of $2.3 billion decreased 0.3% year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2023, Interpublic had cash and cash equivalents of $1.57 billion, down from $1.63 billion held a quarter ago. Total debt was $3.20 billion, which was the same as of the end of the previous quarter.
For the third quarter of 2023, IPG repurchased 2.6 million shares at an average cost of $36.4 per share, totaling $91 million including fees. In the reported quarter, IPG declared and paid out a common stock cash dividend of 31 cents per share to a total of $118.6 million.
2023 Guidance
The company expects organic net revenues to grow at around 1-2%.
The adjusted EBITA margin is still expected to be 16.7%.
The following better-ranked stocks from the Business Services sector are worth consideration:
Automatic Data (ADP - Free Report) currently has a Zacks Rank #2 (Buy). It outpaced the Zacks Consensus Estimate in all trailing four quarters, the average surprise being 3.1%. The consensus estimate for fiscal 2023 revenues and earnings implies growth of 6.3% and 11.1%, respectively.
Broadridge (BR - Free Report) currently carries a Zacks Rank of 2. It surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched on one instance, the average surprise being 0.5%. The consensus estimate for fiscal 2024 revenues and earnings suggests growth of 7.2% and 8.8%, respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Interpublic (IPG) Misses Q3 Earnings and Revenue Estimates
The Interpublic Group of Companies, Inc.’s (IPG - Free Report) third-quarter 2023 earnings and revenues missed the Zacks Consensus Estimate.
Adjusted earnings (considering 7 cents from non-recurring items) were 70 cents per share, which lagged the consensus estimate by 6.7%, but increased 11.1% on a year-over-year basis.
Net revenues of $2.31 billion missed the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion.Total revenues of $2.68 billion increased 1.5% year over year.
Interpublic Group of Companies, Inc. (The) Price, Consensus and EPS Surprise
Interpublic Group of Companies, Inc. (The) price-consensus-eps-surprise-chart | Interpublic Group of Companies, Inc. (The) Quote
Operating Results
The operating income in the quarter came in at $376.8 million, which increased 10.2% from the prior-year quarter’s levels but was lower than our expected $404.1 million. The operating margin on net revenues increased to 16.3% from 14.9% in the year-ago quarter and exceeded our estimated 14.6%. The operating margin on total revenues also increased to 14.1% from 13% in the year-ago quarter.
Adjusted EBITA was $397.2 million, increasing 11.5% from the prior-year quarter’s level but missing our estimated $457.2 million. Adjusted EBITA margin on net revenues increased to 17.2% from 15.5% in the year-ago quarter and beat our estimated 15.4%. Total operating expenses of $2.3 billion decreased 0.3% year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2023, Interpublic had cash and cash equivalents of $1.57 billion, down from $1.63 billion held a quarter ago. Total debt was $3.20 billion, which was the same as of the end of the previous quarter.
For the third quarter of 2023, IPG repurchased 2.6 million shares at an average cost of $36.4 per share, totaling $91 million including fees. In the reported quarter, IPG declared and paid out a common stock cash dividend of 31 cents per share to a total of $118.6 million.
2023 Guidance
The company expects organic net revenues to grow at around 1-2%.
The adjusted EBITA margin is still expected to be 16.7%.
Currently, Interpublic carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Stocks to Consider
The following better-ranked stocks from the Business Services sector are worth consideration:
Automatic Data (ADP - Free Report) currently has a Zacks Rank #2 (Buy). It outpaced the Zacks Consensus Estimate in all trailing four quarters, the average surprise being 3.1%. The consensus estimate for fiscal 2023 revenues and earnings implies growth of 6.3% and 11.1%, respectively.
Broadridge (BR - Free Report) currently carries a Zacks Rank of 2. It surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched on one instance, the average surprise being 0.5%. The consensus estimate for fiscal 2024 revenues and earnings suggests growth of 7.2% and 8.8%, respectively.