Why Advertising Company Interpublic Group's Shares Are Falling Today

The Interpublic Group of Companies Inc IPG shares are trading lower by around 4% after it reported Q3 FY23 results.

The company reported revenue (including billable expenses) of $2.68 billion, beating the consensus of $2.38 billion. 

Revenue, before billable expenses, stood at $2.31 billion (+0.6% Y/Y). Organic revenue was down 0.4% Y/Y in the quarter.

Adjusted EBITA (before restructuring charges) fell to $397.2 million from $356.2 million a year ago, with margins contracting to 17.2% from 15.5% in the prior-year quarter.

Adjusted EPS of $0.70 missed the consensus of $0.73.  

As of September 30, 2023, cash and cash equivalents totaled $1.57 billion. During the first nine months of 2023, IPG repurchased 6.1 million shares worth $219.0 million.

Philippe Krakowsky, CEO, said, "Given the evolving business climate and our portfolio of clients and capabilities, as we look at the remainder of the year, we believe organic growth in the fourth quarter will be approximately 1%. Concurrently, we remain fully on track to deliver our margin goal for the year of 16.7%, which is unchanged, and represents margin expansion relative to 2022." 

"We are focused on closing the year as strongly as possible and, specific to areas of underperformance, will simultaneously assess internal structural solutions in order to improve our growth profile. We continue to be in-market with compelling offerings that help marketers grow and deliver business outcomes. This has translated to strong new business success for us year-to-date, and which will provide some tailwinds as we move into 2024."

Price Action: IPG shares are down 4.20% at $27.34 premarket on the last check Friday.