Interpublic profit shines amid slowing ad spending

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(Global Markets) - Interpublic Group of Companies (IPG.N) posted market-beating results and stood by its full-year outlook despite global peers warning of slowing ad spend, sending shares of the second-biggest U.S. advertising and marketing group up 18 percent.

Most ad groups across the world have been under increasing pressure in recent months due to uncertainty over Europe's sovereign debt crisis and sluggish growth elsewhere.

Earlier on Friday, WPP Plc (WPP.L), the world's largest advertising company, cut its 2011 outlook on slowing growth in the United States and the euro zone debt crisis.

In contrast, Interpublic said it will meet or surpass its organic revenue growth forecast of 4-5 percent and operating margin outlook of 9.5 percent, despite macro uncertainties.

"We have seen little in the way of pullbacks among clients, despite the economic climate," Chief Executive Michael Roth told analysts on a call.

The performance of the most economically sensitive sectors -- automobiles, financial services and retail -- remained solid in the third quarter, Roth said.

He added that in 2012, Interpublic would be vigilant on costs, though it was too early to comment, given the uncertain macroeconomic environment.

Results from Interpublic and its larger U.S. peer Omnicom (OMC.N) bode well for smaller U.S. advertising companies such as Lamar Advertising (LAMR.O) and Focus Media Holding Ltd.

Earlier this month, Omnicom Group Inc (OMC.N) posted estimate-beating results as its international sales surged.

For the third quarter, Interpublic's net income jumped to $208.1 million, or 40 cents per share, from $45.3 million, or 8 cents per share, a year ago.

Excluding a benefit from the sale of about half of its holdings in Facebook, the company earned 16 cents per share.

In August, the company sold half of its 0.4 percent stake in Facebook for $133 million, recording a related pre-tax gain of $132.2 million.

Analysts expected third-quarter net income of 10 cents a share on $1.65 billion in revenue, according to Thomson Global Markets I/B/E/S.

Shares of New York-based Interpublic were trading up 14 percent at $10.16 on Thursday on the New York Stock Exchange after touching a high of $10.50 earlier in the session. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Gopakumar Warrier, Saumyadeb Chakrabarty)