The Interpublic Group of Companies, Inc. (NYSE:IPG) reported solid fourth-quarter 2019 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of 88 cents per share beat the consensus mark by 6% but declined 1.1% on a year-over-year basis. Net revenues of $2.43 billion beat the consensus estimate by 1.8% and increased 0.8% on a year-over-year basis. The top line benefited from organic revenue growth of 2.9%, which was, however, partially offset by a negative impact of 1% due to foreign currency movement and 1.1% due to divestitures.
In the reported quarter, the company witnessed organic net revenue growth of 2.1% in the United States and 4.1% in international markets. Total revenues of $2.90 billion increased 1.6% year over year.
Over the past year, shares of Interpublic have gained 7.3% against 2% decline of the industry it belongs to and 21.4% rise of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Operating Results
Operating income in fourth-quarter 2019 came in at $491.3 million compared with $459.1 million in the prior-year quarter. Operating margin on net revenues improved to 20.2% from 19% in the year-ago quarter. Operating margin on total revenues rose to 16.9% from 16% in the year-ago quarter.
Adjusted EBITA came in at $512.7 million compared with $503.7 million at the end of prior-year quarter. Adjusted EBITA margin on net revenues rose to 21.1% from 20.9% in the year-ago quarter. Adjusted EBITA margin on total revenues rose to 17.7% from 17.6% in the year-ago quarter.
Total operating expenses of $2.41 billion declined 0.6% year over year.
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 Dec 31, 2019, Interpublic had cash and cash equivalents of $1.19 billion compared with $520.5 million at the end of the prior quarter. Total debt was $3.33 billion compared with $3.62 billion at the end of the prior quarter.
Dividend Payout
During the reported quarter, the company declared and paid out a cash dividend of 23.5 cents per share amounting to $90.9 million.
2020 Outlook
Interpublic unveiled its 2020 guidance. The company expects organic revenue growth of 3% and EBITA margin expansion of 20 basis points.
Zacks Rank & Upcoming Releases
Currently, Interpublic carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are awaiting fourth-quarter 2019 earnings of key players like Delphi (NYSE:DLPH) , Waste Management (NYSE:WM) and Republic Services (NYSE:RSG) , each scheduled to release results on Feb 13.
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Interpublic Group of Companies, Inc. (The) (IPG): Free Stock Analysis Report
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