Boston, MA 10/21/2013 (wallstreetpr) – Markets gave a complete thumbs down to Interpublic Group of Companies Inc (NYSE:IPG)’s third quarter results and shares of company tanked by more than 5%. Company’s revenues crossed $1.70 billion in third quarter of 2013. This was an increase of 2.8% above $1.67 billion which was achieved in same quarter last year. A similar trend was shown in nine month numbers and there also revenues rose by 2.4% over previous year.
On the earnings front, company achieved earnings of 11 cents per share. Though this was way below 17 cents achieved last year, it should also be noted that these profitability figures were affected by an early extinguishment notes due in 2017. This resulted in a pre tax charge of more than $45 million and reduced the net income to $45.5 million. Net income previous year was $68.7 million.
Due to this non-recurring event of early redemption of notes, company was unable to meet consensus estimates for net profits. AS per market consensus, company was to close the quarter with earnings of 15 cent per share. But since company could only manage 11 cents per share, share of company tanked during market hours. Even if the numbers were to be adjusted to negate the effect of this one time expenditure, an EPS of 17 cents would have missed Zacks Consensus Estimate of 18 cents. Analysts at Zack continue to keep a rating of Hold for the stock. Another rating agency TheStreet has given a Buy rating for the stock and has the view that this correction in stock price is a knee jerk reaction and provides long term investors with a good entry point to initiate accumulation.
Interpublic has also issued guidance for next quarter and its aims to grow its revenue by anywhere between 2 and 3%. It also plans to return cash being accumulated on company’s books to shareholders by means of stock repurchase and dividends.