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Interpublic (IPG) Surpasses Q3 Earnings & Revenue Estimates

·3-min read

The Interpublic Group of Companies, Inc. IPG reported better-than-expected third-quarter 2020 results.

Adjusted earnings of 53 cents per share beat the Zacks Consensus Estimate by 43.2% and improved 8.2% on a year-over-year basis.

Net revenues of $1.95 billion beat the consensus estimate by 3.4% but decreased on a year-over-year basis due to organic net revenue decrease of 3.7%, negative impact of 0.3% due to foreign-currency movement and 1.2% due to dispositions. Total revenues of $2.13 billion declined 12.7% year over year.

So far this year, shares of Interpublic have lost 22% compared with 37.9% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite rose 7%.

 

Let’s check out the numbers in detail.

Operating Results

Operating income in third-quarter 2020 came in at $248.6 million compared with $280.3 million in the prior-year quarter. Operating margin on net revenues decreased to 12.7% from 13.6% in the year-ago quarter. Operating margin on total revenues rose to 11.7% from 11.5% in the year-ago quarter.

Adjusted EBITA came in at $269.9 million, compared with $302 million at the end of the prior-year quarter. Adjusted EBITA margin on net revenues declined to 13.8% from 14.7% in the year-ago quarter. Adjusted EBITA margin on total revenues rose to 12.7% from 12.4% in the year-ago quarter.

Total operating expenses of $1.88 billion declined 13% year over year.

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 Price, Consensus and EPS Surprise

Interpublic Group of Companies, Inc. The price-consensus-eps-surprise-chart | Interpublic Group of Companies, Inc. The Quote

Balance Sheet

As of Sep 30, 2020, Interpublic had cash and cash equivalents of $1.63 billion, compared with $1.09 billion at the end of the prior quarter. Total debt was $3.96 billion compared with $3.97 billion at the end of the prior quarter.

Dividend Payout

During the reported quarter, the company declared and paid out a cash dividend of 25.5 cents per share, amounting to $99.4 million.

Currently, Interpublic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2020 earnings of key players like S&P Global SPGI, Fiserv FISV and Waste Connections WCN. While S&P Global and Fiserv are slated to release their results on Oct 27, Waste Connections is scheduled to release the same on Oct 28.

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Fiserv, Inc. (FISV) : Free Stock Analysis Report
 
Interpublic Group of Companies, Inc. The (IPG) : Free Stock Analysis Report
 
Waste Connections, Inc. (WCN) : Free Stock Analysis Report
 
SP Global Inc. (SPGI) : Free Stock Analysis Report
 
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