Restructuring costs and a soft ad market added to the Interpublic Group Cos. continuing woes as it reported a second quarter net loss of $13.5 million—its second consecutive losing quarter—compared with a net profit of $109 million one year ago.
The results widely missed Wall Street’s estimates.
“Our results this quarter held no surprises,” CEO David Bell said in the earnings statement. “As I have indicated previously, Interpublic is in the early stages of a turnaround.”
Since the end of 2002, about 1,450 positions have been eliminated, bringing the total number of staff to about 44,500. More layoffs are expected over the next two quarters, a spokesperson confirmed.
The company, the No. 2 owner of advertising agencies behind Omnicom Group, has withdrawn previous earnings guidance for the full year, citing the challenging business environment. Interpublic said total restructuring charges would reach $200 million.
Second-quarter revenue totaled $1.5 billion, compared to $1.49 billion a year earlier.
For the first six months of 2003 Interpublic reported a net loss of $22.1 million compared to net income of $168.8 million, revenue was $2.82 billion versus $2.81 billion one year ago.
In August 2002, the company revealed accounting irregularities. Since then, its stock has slumped and its credit ratings have been repeatedly reduced.
Interpublic operates McCann-Erickson WorldGroup, FCB Group and Lowe & Partners, as well as advertising and promotion agencies Draft and Zipatoni.
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