Omnicom (OMC) To Report Q4 Earnings: What's In The Cards?

Omnicom Group Inc. (NYSE:OMC) is scheduled to release fourth-quarter 2019 results on Feb 11, before market open.

Over the past year, shares of Omnicom have gained 2.5% against 1.4% decline of the industry it belongs to and 22.1% rise of the Zacks S&P 500 composite.

Let’s check out the expectations in detail.

Top Line Likely to Decline Year Over Year

The Zacks Consensus Estimate for the company's fourth-quarter revenues is pegged at $4.08 billion, suggesting a 0.2% decline from the year-ago quarter’s actual figure. The top line is expected to reflect the impact of decline in acquisition revenues, net of disposition revenues and unfavorable impact of foreign exchange movements, partially offset by higher organic revenue growth.

In third-quarter 2019, revenues of $3.62 billion decreased 2.4% year over year. Acquisition revenues, net of dispositions revenues declined 3.1% and foreign currency translation had a negative impact of 1.5%. In the same period, organic revenue growth was 2.2%.

Bottom Line Likely to Improve Year Over Year

The Zacks Consensus Estimate for earnings is pegged at $1.87, indicating a year-over-year increase of 5.7%. The bottom line is expected to have benefited from the change in business mix resulting from the disposition of several non-strategic or underperforming agencies over the past year. Also, operational efficiency efforts through investments in real estate, back-office services, procurement and IT are expected to get reflected in the bottom-line number.

In third-quarter 2019, adjusted earnings of $1.32 per share increased 6.5% on a year-over-year basis.

What Our Model Says

Our proven Zacks model does not predict an earnings beat for Omnicom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Omnicom has an Earnings ESP of -0.27% and a Zacks Rank #3.