Interpublic (IPG) has reported third quarter net income of $217.5m (£179.2m), thanks to a massive gain from the sale of shares in Facebook as well as revenue growth of 11.1% year on year.
In the same quarter in 2010, IPG registered net income of $45.6m on revenues of $1.55bn.
The company’s bottom line growth was somewhat flattered by a $132.2m pre-tax gain from the sale of approximately half its holdings in Facebook.
However, there was also substantial improvement in IPG’s main business, which includes advertising agencies McCann Erickson and Draftfcb and media agencies Universal McCann and Initiative.
Revenue rose 11.1% year on year to $1.73bn, with organic growth of 8.7%.
UK revenue climbed 10.9% and by 4.3% on an organic growth basis. This helped operating income surge 72.9% to $173.2m.
Michael Roth, chairman and chief executive, said: “Though macro uncertainly remains, we are confident that our performance for the nine months has positioned us to meet or surpass our targets of 4%-5% organic revenue growth and operating margin of 9.5% or better.”
Measured against the other marketing services groups which have reported third quarter results over the past two weeks, Interpublic’s organic growth is the highest.
Our view
Aside from the catchy headline, this is not about Facebook it’s about IPG at last demonstrating real positive growth.
In the 80s & 90s IPG was THE powerhouse of our industry well before WPP & regularly topping Omnicom. It fell to earth with through some of its key country managers’ greed and thinking it could play fast and loose with the SEC. That followed by the 2008-10 economic recession, took its toll on IPG’s fragile recovery and it has been playing catch up with the other Network groups ever since.
At last we are seeing real organic of 4.3% from its agencies and ahead of its competitors. Well done IPG.
The sector needs strong competition and a strong IPG. Probably more importantly it needs strong McCann, Lowe & Draftfcb agencies – something we have yet to see. I believe the seeds have been sown at McCann & Lowe but Draftcb is still in the ‘pending’ file.