WXOW News 19 La Crosse, WI – News, Weather and Sports |Ahead of the Bell: Interpublic Group
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PHILADELPHIA (AP) - Interpublic Group of Cos., the world's third-largest advertising and marketing company, may experience an upturn in business now that its CEO noted that the worst of the advertising downturn is over since it won a slew of key contracts, an analyst said.
Deutsche Bank analyst Matt Chesler said Tuesday that IPG CEO Michael Roth, who has been more reluctant than his peers to call an ad market bottom, did just that at a recent investor conference.
"While his comments were peppered with caution, overall this was the most positive we have heard Michael in some time," Chesler said in a research note. "The risk is now to the upside."
Chesler, who did not change his estimates or investment rating, which stands at "Buy," noted that IPG landed several key contracts, including an estimated $1 billion one for Chrysler, $225 million for Pizza Hut and over $200 million each for Volkswagen and Novartis.
Costs are down about 13 percent and the company said it can handle more business without needing to significantly beef up its workforce.
The analyst expects IPG to report a 12 percent drop in revenue, excluding the effect of acquisitions, in the fourth quarter. That compares with a 14 percent drop in the third quarter.
For the year, Chesler sees revenue falling by 11.8 percent, excluding the effect of acquisitions, and improving to a decline of 2 percent in fiscal 2010.
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