Amid the Dow Jones making fresh all time highs on the back of solid earnings by key Dow components, a largely unreported adverse development for the critical – for tech companies – ad sector has gone largely unnoticed this morning, when ad giant Interpublic reported a miss on 3Q adjusted EPS and revenue estimates, with CEO Michael Roth warning that “organic revenue was negatively impacted by broader trends that are being felt throughout much of the industry.”
Interpublic now sees FY organic revenue growth of 1%-2%, below Jefferies’ estimate of 2.1%.
IPG shares fell as much as 7.0, sliding to the lowest since October 2015, and dragging key peer names lower with Omincom shares down 2%, while WPP slides as much as 2.9% and Publicis down as much as 1.8%. IPG’s commentary on ominous advertising industry trends, excerpted below, comes on the heels of disappointing results from Publicis last week.
Here is the concerning language in the press release about the deteriorating state of the ad industry, which in recent months has gathered significant attention especially when it comes to online advertising, as one after another client has warned they may pull slash their online ad spending budgets on disappointing returns:
This post was published at Zero Hedge on Oct 24, 2017.