Interpublic Boosts Dividend 26% On Rising Profits

(RTTNews) - Advertising and marketing services provider Interpublic Group of Cos., Inc. (IPG) reported Friday a profit for the fourth quarter that surged from last year, reflecting improved operating margins, strong income of consolidated companies, and revenue growth.

Adjusted earnings per share for the quarter missed analysts' expectations by a penny, while quarterly revenues topped their estimates. The company board also declared a 26 percent higher dividend and authorized a new share repurchase program of up to $300 million.

The New York-based company posted net income of $308.9 million or $0.73 per share for the fourth quarter, higher than $193.1 million or $0.44 per share in the prior-year quarter.

Results for the latest quarter include $0.16 per share of net valuation allowance reversal on deferred tax assets in Continental Europe, while the year-ago quarter included $0.12 per share of restructuring and related costs.

Excluding items, adjusted net income for the quarter was $0.57 per share, compared to $0.56 per share in the year-ago quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 4.0 percent $2.21 billion from $2.12 billion in the same quarter last year, and topped fifteen Wall Street analysts' consensus estimate of $2.19 billion.

Organic revenue growth was 4.8 percent, with organic revenue increase of 6.4 percent internationally and 3.4 percent in the U.S. The effect of foreign currency translation on revenues was a negative 2.3 percent, and the impact of net acquisitions was a positive 1.5 percent.

Revenues in the U.S. grew 4.3 percent to $1.15 billion, and international revenues increased 3.6 percent to $1.05 billion from last year.

Operating margin for the quarter expanded 430 basis points to 19.6 percent from last year's 15.3 percent.

Income of consolidated companies surged to $330.7 million from $210.9 million in the year-ago quarter.

Total operating expenses grew 1.3 percent to $1.77 billion from a year ago, with salaries and related expenses declining 5.6 percent, while office and general expenses increased 5.7 percent from last year.

"The competitiveness of our agencies, digital capabilities and offerings in key growth markets - combined with our ability to deliver custom integrated solutions to our clients - is evident in the group's continued strong organic growth and positive new business momentum," Chairman and CEO Michael Roth said in a statement.

The company board also declared a 26 percent higher quarterly cash dividend on its common stock of $0.12 per share, payable quarterly to holders of record on an ongoing basis.

Further, the Interpublic Board authorized a new program to repurchase up to $300 million of the company's common stock.

Looking ahead to fiscal 2015, the company targets 3 to 4 percent organic revenue growth, and 80 to 100 basis points of operating margin expansion.

"Looking to 2015, we believe the tone of the business is solid, yet there remains macro uncertainty relating to both the currency environment and Europe," Roth added.

IPG closed Thursday's regular trading session at $21.16, up $0.33 on a volume of 2.77 million shares. In the past 52-week period, the stock has been trading in a range of $16.14 to $21.25.