Interpublic Group of Cos. climbs after its 1Q loss narrows
NEW YORK—Shares of Interpublic Group of Cos. rose Thursday after reporting its first-quarter loss narrowed on strong international sales growth.
On Wednesday the New York-based advertising and marketing services provider posted a loss after preferred dividends of 15 cents per share, which was smaller than the 16-cents-per-share loss that analysts polled by Thomson Financial expected.
International revenue climbed 15 percent on new clients and increased client spending in Europe and the Asia Pacific region. Interpublic brands include Lowe Worldwide, Weber Shandwick and Deutsch.
Dan Salmon of BMO Capital Markets was pleased with the quarterly results, saying in a client note that the company's 2008 results may come in better than expected due to a minimal number of large accounts that are up for review.
The analyst raised his full-year earnings estimate to 48 cents per share from 45 cents per share and reiterated a "Market Perform" rating.
Citi Investment Research's Catriona Fallon said the first-quarter results indicate Interpublic is moving in the right direction, with the analyst seeing no signs of a pullback.
Fallon lifted the company's 2008 profit forecast to 50 cents per share from 48 cents per share and raised its price target to $10.50 from $10.
In other news, advertising company McCann-Erickson Worldwide agreed on Thursday to pay a $12 million fine to resolve federal regulators' charges of civil accounting fraud in transactions with its parent, Interpublic.
Shares of Interpublic Group of Cos. added 41 cents, or 4.5 percent, to close at $9.46. The stock has traded in a range of $7.22 to $12.99 over the past 52 weeks.
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